BSNL to allow all vendors for new GSM lines

Decision against panel's suggestion.

State-run Bharat Sanchar Nigam Ltd (BSNL) has decided to allow all equipment vendors to bid for its $5 billion tender for installing additional 60 million GSM lines.

This decision can benefit global telecom equipment vendors like Siemens and Lucent, and Huwaei Technologies and ZTE of China.

The service provider has 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.

The decision to allow all companies to bid was taken as it was felt that BSNL would be able to better negotiate the equipment price, company executives said.

In addition, the department of telecommunications wants that new vendors, especially Chinese equipment manufacturers, be allowed to bid in order to minimise installation charges.

Nokia, Nortel, Alcatel and Ericsson estimate the cost per GSM line to be about Rs 3,000. With the upcoming tender, BSNL expected to reduce the cost to Rs 1,500 per line, executives said. "We will issue tenders for 40 million GSM lines before the end of the month, and this will be followed by a subsequent tender for an additional 20 million lines," said a BSNL executive. The two tenders will also be for 15 million 3G-enabled lines.

The high-level committee, which submitted its report recently, had said new vendors would create inter-operability problems and delay the project. It had also said more vendors would lead to compatibility problems between networks installed by different operators.

The committee had pointed out that private operators had opted for two vendors at the most. The tender will have a "manufacturing clause" stipulating that vendors need to have an equipment manufacturing facility in India.

Foreign players are lining up manufacturing plans to be eligible for the tender. Alcatel and ITI Ltd have entered into an agreement to manufacture GSM equipment In India.