BSNL, Motorola GSM row ends

Will enable state operator to go ahead with its $4.8 bn expansion plan.

Global handset and equipment major Motorola has withdrawn the case it filed on October 09, 2006, in the Delhi High Court challenging its disqualification for state-owned telephony major Bharat Sanchar Nigam Ltd's (BSNL's) $4.8 billion GSM contract.

The move paves the way for the lowest bidders "" Sweden-based Ericsson AG and Finland-based Nokia "" to share the 45.5-million-line contract between themselves.

"The move will enable Bharat Sanchar Nigam Ltd to pursue its GSM expansion plans in the country. We are ready with the process of awarding the contract to the lowest bidders and this will take place in the next couple of weeks," BSNL Chairman and Managing Director A K Sinha told Business Standard.

The German company was the lowest bidder and is slated to get 60 per cent of the 45.5 million lines. Nokia, the second-lowest bidder, will get the remaining share of the north-east and north-south zones. Alcatel, along with ITI, had bagged the contract for the west zone.

In a statement issued here today, Motorola said, "Withdrawal of the case in no way reflects any change in Motorola's original position that its bid was in compliance with the tender conditions."

The company said it had decided to withdraw the case to lift capacity constraints on BSNL and allow it to participate in the telecom boom.

However, equipment manufacturers say the Motorola move might not be such good news for the successful bidders. "The lowest bid price of $107 per line will make it difficult for bidders to make money. So those that have got the contract might be in trouble too," an analyst said.

Motorola was disqualified by BSNL along with Chinese equipment major ZTE on "technical grounds".