BSNL to invite bids for $4.5 bn contract next week

Bhaskar Hazarika

NEW DELHI: The Bharat Sanchar Nigam Ltd (BSNL) would invite bids for the execution of its second phase of the cellular upgradation contract worth $4.5 billion (about Rs 21,000 crore) next week.

The 60 million GSM lines tender, which was initially slated for October 2005, but was delayed on technical grounds.

“We admit there has been delay in inviting the bids for the contract, but it is a huge contract and that is the reason for the delay,” a highly placed BSNL official, who requested anonymity, said.

The official added that initially BSNL had planned to issue the contract in two divisions, with 40 million lines and 20 million. But now the company has decided to invite bids for the entire contract.

Sources suggested that Ericsson, Nokia and Alcatel are likely to be selected for the mega contract. With Alcatel and Nokia winning the first phase of BSNL's GSM network expansion deals, chances are that they might be awarded the contract.

However, most of the international vendors are eying the contract with the hope of winning it with Nortel expecting to be selected for it. Lucent Technologies Inc. and Siemens are also in the race.

Incidentally, BSNL plans to set aside 25 to 30 percent of the lines for 3G.

The mega deal reflects the rapidly growing demand for telecom services in India. Telecom industry is adding over three million mobile users every month. BSNL has signed up more than one million mobile customers in December, bringing its total to 14 million.

With huge competition in the mobile market service operators are responding with ambitious plans to build out their mobile networks in particular, which cover just a one-third of the country. The Mahanagar Telephone Nigam Limited (MTNL) is also planning to invite bids on a contract for 4 million GSM lines.