BSNL tender in 8 months

The state-run BSNL, whose earlier 45.5 million GSM line tender was cut to half, will invite fresh bids for installing up to 50 million lines to expand its cellular capacity.

"I am told that they are ready to go for a larger tender ... 40-50 million lines....I suggested to give more strength to BSNL... Another process must be completed in the stipulated time, maybe within 8-9 months," Telecom Minister A Raja told newspersons here today.

He said the Bharat Sanchar Nigam Ltd (BSNL) board would decide on whether the bids should include 3G.

BSNL has already ordered 14 million 2G GSM lines from Ericsson and Nokia in the first phase of 23 million lines. They are yet to give their bank guarantees, a mark of acceptance of the deal.

The PSU had to cut the size of its original tender to 23 million lines from 45.5 million lines after Raja asked it to negotiate for a lower price from 107 a dollar per line.

The fresh bids form an effort on BSNL's part to compensate for the loss because of the cut in tender size. BSNL has said final orders for another 3.5 million GSM lines will be placed only after the 3G policy is announced and the spectrum is made available.

The state-owned telco, which had slipped to the fourth position in terms of subscribers base due to capacity constraints, is finding it hard to compete with private operators like Bharti Airtel Ltd, Reliance Communications, Idea Cellular and Hutchison Essar (now controlled by Vodafone). It has reported a fall in monthly subscriber base addition.

Indian wireless operators added 7.34 million subscribers in June. Analysts forecast the user base will top 500 million in five years. The government also plans to set up 1,00,000 broadband centres at a cost of Rs 5,400 crore in public-private- partnership mode.

The centres would cover 6,00,000 villages by March 2008. The government will spend Rs 1,600 crore on the scheme while the rest is expected to come from private players, Raja said.