Ericsson Holds Back on BSNL Bid

9:15 AM -- Despite being invited to bid for a 5.5 million-line GSM capacity expansion deal by state-owned Indian operator Bharat Sanchar Nigam Ltd. (BSNL) , Swedish vendor Ericsson AB (Nasdaq: ERIC) did not submit a bid because of new security requirements introduced by the Indian government, reports The Wall Street Journal. (See India Clears Way for Chinese Imports.)

Ericsson was one of five vendors invited in late August to bid for the deal, which involves expanding and upgrading the carrier's 2G mobile networks in the north and east regions of the country (covering 13 of India's 22 circles, or service areas).

But while the other four -- Alcatel-Lucent (NYSE: ALU), Huawei Technologies Co. Ltd. , Nokia Networks , and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) -- responded to the tender and are now having their submissions evaluated, Ericsson didn't bid, citing concerns about the new technology escrow process put in place as part of the Indian government's security clampdown. (See Ericsson Balks at Source-Code Rule.)

The expansion project, believed to be worth around US$500 million, is the same one that BSNL announced earlier this year, when the carrier invited only AlcaLu, Ericsson, and NSN to bid. But the operator re-issued the tender once the security issues were resolved in late August. (See BSNL Blocks Huawei, ZTE Bids and India Clears Chinese Gear Orders.)

— Ray Le Maistre, International Managing Editor, Light Reading

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