Nokia, Ericsson, four others bid for $9-bn BSNL tender

Six global telecom vendors — Ericsson, Nokia Siemens, Huawei, ZTE, Alcatel-Lucent and Nortel — have bid for the mega tender of 93 million GSM lines floated by state-run Bharat Sanchar Nigam Ltd (BSNL). The tender is valued at $8.5-9 billion.

BSNL Chairman Kuldeep Goyal said the company hoped to place orders for the first phase of the contract by early 2009.

Asked about the per-line cost, Goyal said it would be less than last year’s tender for 43 million GSM lines. The cost then was $91 per line.

BSNL Director (finance) SD Saxena said it was difficult to put a value of the deal at this stage as the financial bids had not yet opened. Industry sources said the size, at $91 per line, could be $8.5-9 billion.

Goyal said three-four vendors had applied in each of the four zones, while two companies had applied for all four zones.

However, Motorola, a key player in the segment, was absent. Company sources said they decided to keep off the tender keeping in mind the contract’s financial viability. Analysts, however, said the equipment cost had come down and BSNL was justified in lowering the price per line.

In April, BSNL had used up almost all its 36 million GSM lines and most of its 5.5 million CDMA lines. It had then said that it would add 33.5 million lines in the year to March 2009.

Lack of infrastructure has been hampering BSNL’s capacity to add wireless subscribers.

The state-run telecom major has, for the first time ever, divided the tender into four components — 2G lines, 3G lines, infrastructure and operating and business support systems — with a provision that companies can bid for any of the four components. Also, a single company can bid for all the components.

The company will open the bids for the IT part of the contract on September 30.

Ten companies, including GTL, ACME Telepower, Sujana Telecom, TVS, Terracom, KEC International and Estel, had bid for the infrastructure part of the tender, Goyal said.

BSNL has set aside 25 per cent of the 93 million lines for 3G services as it aims to complete the rollout of the services on a pan-Indian basis by the middle of next year.