Vendors Queue Up for Indian Deals

Indian mobile operator Sistema Shyam TeleServices Ltd. has kicked off a new round of mobile infrastructure contract awards by handing deals to three vendors -- Alcatel-Lucent (NYSE: ALU), Huawei Technologies Co. Ltd. , and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) -- that will help build out its nationwide mobile network. (See Shyam Names Vendors.)

The contract awards come as Shyam, which received licenses earlier this year to take its CDMA network from the single region of Rajasthan to all 23 Indian telecom service areas, was allocated more spectrum last month for a total of 19 circles. (See A Guide to India's Telecom Operators and Shyam Adds CDMA Spectrum.)

The three vendors, which will supply base stations, switching equipment, and network design and installation services, will each be allocated contracts for specific regions.

Russian conglomerate Sistema JSFC (London: SSA), which now holds a 73.71 percent stake in Shyam, says it will invest at least $5 billion in expanding Shyam's network. (See Sistema Adds to Shyam Stake.)

It’s also directing some business to its in-house telecom equipment division JSC Sitronics (London: SITR), with Shyam signing a $5.7 million contract with Sitronics subsidiary Intracom Holdings S.A. for point-to-point radio link gear in Rajasthan. (See Shyam Deploys Intracom.)

The rapid growth of India’s mobile subscribers has been a boon to the telecom equipment market as operators rush to add capacity to their networks and expand into new regions.

According to Cybermedia Research, revenues from carrier equipment deals rose 32 percent in the 2007-2008 financial year to 569.94 billion Indian Rupees ($13.17 billion). Ericsson AB (Nasdaq: ERIC), Nokia Networks , and Alcatel-Lucent led the market.

And the spate of new licenses and spectrum awards means there will be plenty of new equipment contracts up for grabs in India during the coming months.

Videocon Group subsidiary Datacom Solutions, a new entrant to the market, is preparing a request for proposals (RFP) for a deployment of 70 million GSM lines as it looks to begin rolling out its network in August. (See India's Videocon Plans Mobile Launch.)

And real estate firm Unitech says it's in talks with three European and two Chinese vendors to build its network, according to the Economic Times. (See India's Unitech Gears Up for Telecom.)

Three other firms have received licenses and spectrum for new networks –- Swan Communications, S Tel, and BPL Mobile subsidiary Loop Telecom -- while operators Idea Cellular Ltd. , Tata Teleservices Ltd. , and Reliance Communications Ltd. (RCom) are expanding their networks into new regions. (See Indian Gov't Grants Mobile Licenses.)

In addition, state-run Bharat Sanchar Nigam Ltd. (BSNL) is in the process of receiving bids for the supply of 93 million GSM lines to relieve the stress on its congested network. (See BSNL Floats New Mega GSM Tender.)

— Nicole Willing, Reporter, Light Reading

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