& cplSiteName &

BSNL Expansion Delayed Yet Again

Light Reading
News Analysis
Light Reading
7/11/2007
50%
50%

Indian operator Bharat Sanchar Nigam Ltd. (BSNL) 's mobile network expansion is once again mired in controversy, prompting employees to strike Wednesday in protest at further delays in awarding equipment contracts.

After multiple hiccups in the bidding process, BSNL had finally been poised to place orders worth more than $4 billion for GSM equipment with Ericsson AB (Nasdaq: ERIC) and Nokia Networks in May. (See BSNL to Award $4.5B Mobile Contracts.)

But India's new IT and Communications minister, Andimuthu Raja, has taken issue with the tender negotiated under predecessor Dayanidhi Maran, and is pushing the state-run operator to renegotiate the prices quoted by the vendors. (See India Roundup: Partnerships & Politics.)

A statement on the Ministry of Communications and IT's Website says that Raja "found some discrepancies in [the] processing of GSM tenders and accordingly, advised BSNL to look into those issues in the larger interest of BSNL."

Ericsson put in a bid to supply the equipment at $107 per line, and, as the lowest bidder, it would get 60 percent of the 45.5 million lines to be installed. Nokia was the second lowest bidder at $160 per line, so it would get the remaining 40 percent if it agreed to meet Ericsson’s price.

But Raja has questioned why BSNL would award the bulk of the contracts to Ericsson, when Motorola Inc. (NYSE: MOT) is supplying GSM equipment to BSNL’s sister carrier, Mahanagar Telephone Nigam Ltd. (MTNL) , at a price of $70 per line.

Raja has also asked BSNL to clarify why it disqualified Motorola from bidding, a move that resulted in Motorola taking the operator to court. (See Moto Stalls BSNL's Wireless Tender.)

Ericsson has reportedly refused to reduce its bid further, so BSNL is now under pressure to remove an order of 3G gear that was to be included in the contracts and focus on procuring cheaper GSM equipment. Raja argues that it's unnecessary for the carrier to install 3G lines when the government is yet to agree on a 3G policy and suggests that BSNL issue a separate 3G tender at a later date. (See India on Edge Over 3G.)

BSNL could end up having to invite fresh bids from all the major vendors, including Motorola and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763), which was also disqualified during the technical evaluation.

The ongoing saga led 400,000 BSNL employees to stage a one-day strike on Wednesday, demanding that the carrier award the contracts immediately. In a prepared statement V.A.N. Namboodiri, secretary general of the BSNL Employees' Union, claimed that "the intolerable delay will be the death knell of BSNL unless immediate action is taken. Not only is BSNL unable to provide new connections, but also its relevance in [the] telecom sector itself will be questionable unless immediate action is taken."

The statement notes that BSNL exhausted its capacity to provide new mobile connections in March. "BSNL was unable to provide even nominal connections during the last three months... sliding down to the fourth position" in market share, it says.

In response to the strike, the Communications and IT Ministry’s statement claims that union members are protesting "for reasons best known to them." BSNL is due to respond to Raja's queries within a week and Raja has assured the union that in making a decision on its response, "the interests of BSNL and its employees will be protected at any cost."

"During the intervening period till receipt of supplies under the tender, appropriate steps will be taken to ensure that BSNL does not suffer due to lack of network capacity," it says, without providing details.

BSNL, which has around 28 million mobile subscribers, has been attempting to kickstart this second phase of its network expansion since early 2006 as it struggled to keep pace with India's massive demand for telecom services. Carriers are now adding around 6 million new subscribers every month, prompting them to embark on massive expansion projects to increase capacity and relieve network congestion.

— Nicole Willing, Reporter, Light Reading

(1)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
readlightly
50%
50%
readlightly,
User Rank: Light Beer
12/5/2012 | 3:05:26 PM
re: BSNL Expansion Delayed Yet Again
Vendors- Pay the new minister and get started. Your "investments" with the old minister have been fruitless.....woe betide the continuing saga of India's bureaucracy.
Featured Video
From The Founder
Light Reading founder Steve Saunders grills Cisco's Roland Acra on how he's bringing automation to life inside the data center.
Flash Poll
Upcoming Live Events
February 26-28, 2018, Santa Clara Convention Center, CA
March 20-22, 2018, Denver Marriott Tech Center
April 4, 2018, The Westin Dallas Downtown, Dallas
May 14-17, 2018, Austin Convention Center
All Upcoming Live Events
Infographics
SmartNICs aren't just about achieving scale. They also have a major impact in reducing CAPEX and OPEX requirements.
Hot Topics
Here's Pai in Your Eye
Alan Breznick, Cable/Video Practice Leader, Light Reading, 12/11/2017
Verizon's New Fios TV Is No More
Mari Silbey, Senior Editor, Cable/Video, 12/12/2017
Ericsson & Samsung to Supply Verizon With Fixed 5G Gear
Dan Jones, Mobile Editor, 12/11/2017
Cloudy With a Chance of Automation: Telecom in 2018
Iain Morris, News Editor, 12/12/2017
Juniper Turns Contrail Into a Platform for Multicloud
Craig Matsumoto, Editor-in-Chief, Light Reading, 12/12/2017
Animals with Phones
Don't Fall Asleep on the Job! Click Here
Live Digital Audio

Understanding the full experience of women in technology requires starting at the collegiate level (or sooner) and studying the technologies women are involved with, company cultures they're part of and personal experiences of individuals.

During this WiC radio show, we will talk with Nicole Engelbert, the director of Research & Analysis for Ovum Technology and a 23-year telecom industry veteran, about her experiences and perspectives on women in tech. Engelbert covers infrastructure, applications and industries for Ovum, but she is also involved in the research firm's higher education team and has helped colleges and universities globally leverage technology as a strategy for improving recruitment, retention and graduation performance.

She will share her unique insight into the collegiate level, where women pursuing engineering and STEM-related degrees is dwindling. Engelbert will also reveal new, original Ovum research on the topics of artificial intelligence, the Internet of Things, security and augmented reality, as well as discuss what each of those technologies might mean for women in our field. As always, we'll also leave plenty of time to answer all your questions live on the air and chat board.

Like Us on Facebook
Twitter Feed