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No Takers for ITI Plants

12:15 PM -- State-owned equipment vendor ITI Ltd. has failed to attract any bids for the three manufacturing facilities it has been trying to sell. April 5 was the deadline for bids to be submitted.

Uncertainty over the fate of ITI's existing workforce appears to have put off any interested parties. "The clarity on the labor issue was totally missing, and that was one of the reasons that it didn't get any bids for its production units," says an industry source on condition of anonymity.

Like its main customer, government-owned carrier Bharat Sanchar Nigam Ltd. (BSNL) , ITI is regarded as being overstaffed: Potential bidders, though, were apparently not provided with information about workforce commitments. In addition, there was no assurance of future orders from BSNL, which created another stumbling block.

Huawei Technologies Co. Ltd. , which has a softswitch and GSM equipment partnership with ITI, had considered bidding, as the company is looking to run its own facilities in India. Lester Herbert, executive director of marketing and strategy and president of the Chinese vendor's India business told Light Reading Asia in a recent interview that Huawei had been considering a number of options, and that "ITI is one of the options we are considering."

Huawei, which has high hopes of building significant business in India, and which has already laid out its plans to grow in the country, is under pressure to start manufacturing its products locally as the country's Intelligence Bureau has raised questions about telecom equipment that is manufactured overseas. (See Huawei to Invest in India.)

The vendor's prospects were dented recently, though, when BSNL decided to scrap its massive GSM equipment procurement, for which Huawei was one of the two chosen suppliers. (See BSNL Scraps Monster Mobile Tender.)

According to industry sources, Huawei has puts its manufacturing plans on hold for now (maybe in part because of the BSNL decision), though some sort of collaboration with ITI could be an option for the future.

Alcatel-Lucent (NYSE: ALU), also an existing ITI partner for GSM equipment manufacturing, was also viewed as a potential bidder.

Like BSNL and India's other state-owned operator Mahanagar Telephone Nigam Ltd. (MTNL) , ITI has failed to fully capitalize on India's telecom services boom during the past few years. While the company has just announced its highest ever annual revenues of 47.3 billion Indian Rupees (US$1.07 billion), the rapid growth in the country's mobile sector has not been reflected by ITI's performance.

— Gagandeep Kaur, India Editor, Light Reading

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