BSNL cancels Huawei tender

Scrapping of 20-million lines order for south zone to delay Rs 32,000-cr project.

In a surprise move, state-run telecom firm BSNL has cancelled the telecom equipment purchase order given to Chinese company Huawei saying the conditions imposed by the vendor are not acceptable, leaving the fate of Rs 32,000-crore capacity addition programme in limbo.

Bharat Sanchar Nigam Ltd (BSNL), after prolonged discussions, had placed order for 20 million GSM lines for the South Zone with Huawei last month.

Sources close to the development said BSNL’s extreme step comes in the wake of the Chinese vendor’s conditional supply of equipments. Huawei’s spokesperson declined to comment. “There was no scope for accepting conditions as the order was placed after detailed negotiations and as a government owned firm (BSNL) we do not accept conditions,” a senior BSNL official said.

When asked about the conditions, the official declined to comment. For the North and Eastern region, the PSU is still negotiating with another vendor, Ericsson, and has not yet finalised the order.

Sources also indicated that BSNL was weighing various options, including calling fresh bids for adding 93 million GSM lines to its networks.

Officials said, in the process, BSNL would lose further market share to private operators, as it might exhaust the remaining capacity in various circles soon.

Last month, BSNL CMD Kuldeep Goyal had said the PSU was in advanced stages of negotiations with Ericsson for the north (25 million) and east zone (18 million) and hoped to finalise it soon.

BSNL had chosen the bids by Ericsson and Huawei, while rejecting the offers made by three other vendors — Nokia Siemens, ZTE and Alcatel Lucent. Nokia-Siemens had challenged the rejection by BSNL and a final verdict on it is still pending in courts.

The PSU has also come under attack for non-transparency with only one vendor for each region. But BSNL said it was a competitive bidding. “Bids are supposed to be competitive. They are global bids,” Goyal had said.