BSNL scraps Rs.350 bln GSM tender
08-03-2010
May adopt the lease instead of buy model
Bharat Sanchar Nigam Ltd (BSNL) decided to scrap its controversial tender for 93 million GSM lines, worth Rs 35,000 crore.
The Pitroda committee had suggested BSNL scrap the 93-million line tender and change the method of its growth from outright purchase of equipment to leasing these. Private telecom players already follow such a model for expansion. By doing so, BSNL would reduce its capital expenditure, besides reducing its problem of having shortage of young trained engineers in the latest technologies, according to the Pitroda report.
The issue of the tender was referred to the committee headed by Pitroda, after many controversies - ranging from home ministry objections on Chinese equipment firms to legal battles by disqualified vendors. The committee also had HDFC Chairman Deepak Parekh and telecom secretary P J Thomas as members.
The hurdles in the project started after BSNL disqualified three of the five bidders on technical grounds. Ericsson and Huawei were shortlisted, while Nokia Siemens, Alcatel Lucent and ZTE were disqualified. Nokia Siemens challenged its disqualification in the Court.
Further, security agencies said BSNL could not buy telecom equipment from any Chinese vendor, including Huawei. BSNL, subsequently, started negotiations with Ericsson for lower prices. However, the Department of Telecommunications said BSNL might not get the best price, since there was no competitive bidding.
Then, the Central Vigilance Commission was asked to examine, which suggested cancelling the tender and calling for bids again. Meanwhile, the tender was put on hold.
Input from Business Standard
Bharat Sanchar Nigam Ltd (BSNL) decided to scrap its controversial tender for 93 million GSM lines, worth Rs 35,000 crore.
The Pitroda committee had suggested BSNL scrap the 93-million line tender and change the method of its growth from outright purchase of equipment to leasing these. Private telecom players already follow such a model for expansion. By doing so, BSNL would reduce its capital expenditure, besides reducing its problem of having shortage of young trained engineers in the latest technologies, according to the Pitroda report.
The issue of the tender was referred to the committee headed by Pitroda, after many controversies - ranging from home ministry objections on Chinese equipment firms to legal battles by disqualified vendors. The committee also had HDFC Chairman Deepak Parekh and telecom secretary P J Thomas as members.
The hurdles in the project started after BSNL disqualified three of the five bidders on technical grounds. Ericsson and Huawei were shortlisted, while Nokia Siemens, Alcatel Lucent and ZTE were disqualified. Nokia Siemens challenged its disqualification in the Court.
Further, security agencies said BSNL could not buy telecom equipment from any Chinese vendor, including Huawei. BSNL, subsequently, started negotiations with Ericsson for lower prices. However, the Department of Telecommunications said BSNL might not get the best price, since there was no competitive bidding.
Then, the Central Vigilance Commission was asked to examine, which suggested cancelling the tender and calling for bids again. Meanwhile, the tender was put on hold.
Input from Business Standard
