Chinese cos get to bid for BSNL’s 93 mn GSM lines

In a major deviation from its earlier stand, government-owned Bharat Sanchar Nigam Ltd...

In a major deviation from its earlier stand, government-owned Bharat Sanchar Nigam Ltd (BSNL) has allowed telecom vendors who do not have manufacturing facilities in India to participate in its tender for 93 million GSM lines. This will make Chinese major Huawei eligible for bidding in the world’s largest telecom tender.

The size of the order for supplying equipment and installing the GSM network is likely to be as high as Rs 40,000 crore, if one goes by the lowest bids submitted by Ericsson in the last tender. The technical conditions have been framed in such a way that another Chinese major, ZTE, too will be able to qualify for the tender. It will be the first GSM tender in which any Chinese telecom vendor will participate without the threat of being disqualified.

The tender conditions envisage, “The eligible bidder company or its parent company shall be a manufacturer of GSM EDGE Radio Access Network (GERAN). Such a bidder company shall also be registered in India to carry out telecom related activity.”

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Huawei was not eligible for participation in BSNL’s previous tender as it envisaged that the vendors should be Indian manufacturers. ZTE on its part submitted bids, which were rejected on technical grounds. Consequently, the field was left open to European and American players. US-based Motorola, too was, disqualified on technical grounds — leaving European majors Ericsson, Nokia, Siemens and Alcatel (through ITI) in the field.

The tender conditions also envisage that the bidder company must have experience of “planning, engineering, supply, installation and commissioning of at least a total of 20 million lines of GSM 900 and/ or GSM 1800 network comprising of GERAN, MSC, IN, SMSC, UMS, SGSN and GGSN. The experience sought can be from single or multiple networks.” Both the Chinese companies meet this condition, said sources.

In case of the last GSM tender floated by BSNL — in 2005 — it took almost two years from the date of inviting bids for the order to be ultimately offered to Ericsson. Nokia Siemens Networks (NSN), the other qualifying bidder, did not accept the order.

When A Raja became Union communications minister following Dayanidhi Maran’s resignation, the first major decision he took was to reduce the quantity of the order by 50 per cent to 22.5 million lines. He also directed BSNL officials to reduce the price to $95 per line from the lowest quoted price of $107 per line.

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Ericsson was the lowest bidder and NSN was the second lowest bidder. As per the tender conditions, Ericsson got 60 per cent of the total quantity while NSN got 40 per cent, which it rejected.

Analysts believe this is one of the reasons why some BSNL officials wanted Chinese vendors to participate in the bids this time. The entry of Chinese players is also expected to bring down prices.

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