BSNL's GSM megadeal may collapse yet again
Indian telco said to be abandoning the tender because of limited vendor interest, as its capacity problems worsen
Published: 20 September, 2011
One of the most tortured wireless contract sagas ever is taking another twist, with Indian state-owned telco BSNL reportedly abandoning its 15m-line GSM tender after many vendors refused to bid.
The GSM expansion award is thought to be worth between INR50bn and INR60bn ($1bn to $1.25bn). It is urgently needed by the telco, whose 2G network is rapidly running out of capacity as mobile demand explodes in the country, creating major problems with quality of service. But over the past four years, the deal has been derailed several times, amid allegations of corruption, vendor quarrels over price, as well as security concerns over Chinese bidders.
Some OEMs, notably Nokia Siemens, have walked away from some elements of BSNL business because of the intense price competition, claiming they could not make profit on the deals. In some cases, the carrier tried to renegotiate the price after some contracts were signed, citing a fall in the cost of network equipment during the course of the tender process.
This time, the Department of Telecom says "only two or three private vendors" showed interest, partly because BSNL is no longer offering a national contract of 90m lines - the original plan back in 2007 - but has divided the country into six zones.
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