BSNL outsourcing plan blocked over security fears

Nicole McCormick
18 May 2010

More dramas have emerged concerning BSNL’s GSM network expansion plans, with India’s Communications Ministry saying no to the state-telco’s plans to outsource its network because of security fears.

In a letter, cited by the Economic Times, the ministry told BSNL that its plans to outsource the building, management, maintenance of its networks to global vendors may pose a “threat to national security.”

Since the government relied on BSNL’s networks during times of external aggression and internal disturbances, the telco should not compromise on security, the letter said.

The latest development once again pushes back BSNL’s expansion plans and adds strain to its current network.

BSNL chairman Kuldeep Goyal revealed the telco intended to no longer issue tenders based on the number of GSM lines to ET earlier this month.

“We are changing our procurement strategy completely,” Goyal told ET.

“We are looking at a managed capacity model. This is the model being followed by private operators. We are now studying how companies like Airtel are executing it.”

BSNL canned its massive $10 billion GSM line tender in March, following a high-level government committee investigation into the botched tender process.

One of the tender irregularities reportedly involved BSNL renegotiating on price with Ericsson.

Ericsson was to deploy 25 million lines in the north zone and 18 million lines in the east zone, worth a combined $2.5 billion, according to ET.

Earlier, Chinese vendor Huawei was reportedly dropped from the tender – it topped the short list to supply 25-million lines in the South Zone for $1 billion – because of security concerns.

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