By Shailendra Bhatnagar

NEW DELHI - Bharat Sanchar Nigam Ltd. (BSNL), India's top telecoms firm by sales, has received five bids in a $4.8 billion tender for 45.5 million GSM lines, a top company official told Reuters.

State-run BSNL, which has the country's third-largest mobile subscriber base, is rapidly expanding its networks to soak up demand in the world's fastest growing wireless services market.

"We have received five technical bids and they have been opened," the official, who declined to be identified, said. "We will now analyse techno-commercial bids."

The five telecoms gear makers to have submitted bids are Nokia, Ericsson, Siemens, Motorola Inc. and ZTE Corp., the official said.

The world's cheapest local mobile call rates -- 2 U.S. cents a minute -- are luring more than 4 million new wireless customers each month, and India now has more than 100 million users, putting it in fifth place in global rankings.

The official did not give any details on financial bids or when they would be opened. Eighteen firms took application forms.

BSNL had said in March the order for 45.5 million lines would be spread between two winners, and that some of the equipment would help BSNL offer data-intensive 3G services, mainly in the cities.

Additionally, BSNL will purchase 18 million lines from state-run telecoms gear maker ITI Ltd.

Galloping growth in the telecoms sector has been spurred by market-orientated government regulation and rising disposable income. The number of mobile customers now exceeds that for fixed-line users.

REPLACE COSTLY IMPORTS

About a third of the equipment bid for in the tender, the largest ever in India, will have to be made locally as part of the government's strategy to boost domestic manufacturing of costly telecoms equipment.

As a consequence, Nokia and Ericsson have already boosted their manufacturing facilities in India. Last week, Motorola said it would invest $100 million in three stages to set up a handset and telecoms gear plant in the country.

Nearly 80 percent of the equipment used by Indian carriers is imported, draining away precious foreign exchange. Booming demand for equipment in the Indian market is crucial to most telecoms gear makers who face mature markets in many western countries.

Over the past three years, Nokia, Ericsson and Motorola have all won multi-year, multi-million dollar contracts from Indian carriers.

New Delhi-based BSNL will fund the expansion mainly through internal accruals. It plans to spend between and 160 170 billion rupees ($3.5-$3.7 billion) in the fiscal year to March 2007 in augmenting services.

Nearly half the equipment will be earmarked for rural areas, where two-thirds of India's billion-plus population live but which is starved of quality telecoms networks. More than a decade since being launched, mobile services are still largely city-centric.

BSNL competes mainly with larger rivals Bharti Airtel Ltd. and Reliance Communications Ltd., both of whom have a nationwide presence. Unlisted BSNL is present in 21 of the 23 zones that make up the country's telecoms sector.

Smaller state-run sibling Mahanagar Telephone Nigam Ltd. competes in the remaining two -- Mumbai and Delhi.

Both Reliance and Bharti plan to invest more than $1 billion in expanding networks each year.

Although GSM is the dominant standard in India, carriers such as Reliance Communications and Tata Teleservices Ltd. operate networks based on CDMA technology.