BSNL mega GSM tender in 3G war

BSNL wants an advanced network to capture 3G subscribers before its private sector rivals, as it already trails behind in implementation of EDGE. The PSU is therefore timing the world’s largest GSM tender to meet a target for 80 million GSM subscribers by 2008. It is reserving around 25-30 per cent of this tender for 3G.

‘‘Though we will be contenders in BSNL’s expansion, we believe the timing is not right for 3G. Wait till 2007 when there are 1 billion plus 3G subscribers worldwide to get best prices for 3G networks. Else, separate GSM and 3G bids to give CDMA and GSM level-playing field,’’ says CS Rao, President and CEO, Lucent Technologies India.

But analysts say the real reason why BSNL’s plan is unpalatable for Lucent is that it is no longer interested in the GSM market. They are more keen to develop technolgies such as HSDPA, the latest version of GSM-3G.

Today, BSNL CellOne is GPRS-ready and the new tender aims to make it EDGE-enabled. At this rate, by 2007, BSNL will match the 3G speeds of Europe in 2000 — a kind of inexpensive and limited 3G, as EDGE users can use multimedia applications and process large data files

‘‘If BSNL implements 3G now, newer technology will develop and it will need costly upgrades far too soon,’’ says Rao.

BSNL itself is stacking up the 3G card slowly and steadily. ‘‘We know there are costs involved but BSNL wants high-speed data services ready when 3G matures. We have studied the economics and we feel we must reap early mover advantage,’’ said a BSNL official.

‘‘As and when the time comes to finalise the tender, we will take into consideration every operator’s concerns,’’ the official said.

BSNL’s GSM tender has global heavyweights such as Motorola, Ericsson, Nortel and Nokia sitting up and taking note of the technology it will implement.

The estimated cost of a single 3G line is Rs 4,000, which could take the total tender value to more than $5 billion.