BSNL’s $6-b GSM contract:-Ericsson, Huawei shortlisted

equipment major Ericsson and Chinese manufacturer of telecom gear Huawei have been shortlisted by Bharat Sanchar Nigam Ltd for its mega 93-million-line cellular project. The project size is estimated to be around $6 billion, making it the single largest contract in the world.

While Ericsson has been shortlisted for North and East zones, Huawei has qualified for West, East and South zones. Other bidders, including ZTE, Nokia Siemens and Alcatel Lucent, have been disqualified on technical grounds. Some of the vendors disqualified, including Nokia Siemens, have supplied equipment to BSNL earlier

Quoting prices

With only one vendor having qualified from three zones, the financial bids submitted by the qualified companies may have lost their relevance. Since there is no second qualified bidder in North, West and South, BSNL will have to give the contract at the price quoted by Ericsson and Huawei respectively. The project envisages both GSM and 3G network rollout.

However, BSNL cannot award the contracts immediately since the Ministry of Home Affairs is yet to give its clearance from the security point of view.

The Ministry had raised concerns regarding some of the foreign vendors, especially about Huawei from China. A committee was set up by the Ministry to evaluate the background of the bidders before the contracts are awarded. This committee is yet to submit its report.

Seeking to open bids

Meanwhile, BSNL has written to the Department of Telecom seeking permission to open the bids submitted by Ericsson in the North zone even before the Ministry submits its report.

BSNL has told the DoT that it was facing acute shortage of GSM capacity and since Ericsson was already an established vendor on its network, the contract for the North zone should be awarded to the Swedish company for this region.

The project is part of a major expansion plan aimed at giving BSNL enough capacity to expand its subscriber base. While private operators have been adding over 2.5 million new users a month, BSNL is adding just over a million.