BSNL plans single tender for 60 mn GSM lines

Bharat Sanchar Nigam Ltd has decided to issue a single tender for installing an additional 60 million GSM lines. This will possibly be the largest-ever telecom expansion deal in the world and estimated to be worth over $5 billion.

The PSU had earlier planned to issue two separate tenders, first for 40 million lines in October 2005, and the second one for an additional 20 million lines in mid-2007.

On approval from the department of telecommunications (DoT), BSNL decided to go for a single tender because "volumes will help it negotiate lowest possible equipment and installation prices", executives said.

The PSU board has also decided to make it mandatory for the vendors bidding for the tender to manufacture equipment directly or through contract manufacturers in India.

"This clause has been added to ensure quality, timeliness of delivery and after-sales service. We are also envisaging 30 per cent value-addition from second year onwards," said a senior BSNL executive.

"On numerous occasions, we had not been able to expand our mobile services, despite high demand, due to the lack of capacity. We do not want to face a similar situation in the future," executives said.

The company board had earlier decided to allow all equipment vendors to bid for its tenders. It had also set aside the recommendations of a high-level committee which had proposed that only the existing vendors "" Nokia, Motorola, Nortel, Ericsson and ITI-Alcatel "" be allowed to bid. This decision benefits global telecom equipment vendors like Siemens and Lucent, and Huwaei Technologies and ZTE of China.

Ericsson and Alcatel-ITI Ltd have recently started indigenous manufacture of base tower stations, while Nokia is setting up a unit in Chennai to manufacture both handsets and network equipment.

Siemens, Motorola, Flextronics and Huwaei Technologies have also announced that they plan to make substantial investments in the manufacturing sector in India.