BSNL nod to Ericsson's conditional supply

In a development that could result in increased costs, state-owned BSNL has placed an “urgent” order for 5.25 million additional GSM lines with Ericsson, but the Swedish company has attached some strict conditions.

“Ericsson is prepared to supply additional capacity only if certain infrastructure items such as tower, generators, shelters, ACs and stabilisers, among others, are not procured,” sources close to the development said.

In view of this, BSNL may have to go for hiring these items from infrastructure providers or directly procure these items, leading to an increase in the cost of GSM lines.

BSNL’s decision could come under scrutiny, since it agreed to most of the conditions put up by Ericsson for accepting an order for add-on capacity for which the tender was floated in 2007 and conditions were agreed upon by both the parties.

Sources said BSNL should have stuck to its original terms and conditions of the tender for placing orders for add-on capacity, for which the public sector undertaking (PSU) is allowed to procure the equipment (only for add-on capacity) without following tender route.

They said this decision was discussed in the recent board meeting of BSNL and the PSU agreed to go ahead with placing the order with Ericsson. BSNL’s decision comes at a time when the PSU is facing another controversy, of disqualifying Nokia-Siemens’ network on technical grounds in its latest tender for adding 93 million GSM lines at an investment of over Rs 32,000 crore.