BSNL's GSM megadeal hangs in balance again

Caroline Gabriel/Wireless Watch
22 Sep 2011

The GSM expansion award is thought to be worth between 50 billion and 60 billion rupees ($1 billion to $1.25 billion). 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 90 million lines – the original plan back in 2007 - but has divided the country into six zones.

The latest tender was announced in July, specifying 14.37 million GSM lines and a 3G-ready core.

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