Ericsson not bidding in BSNL's GSM gear auction

STOCKHOLM, SWEDEN: Sweden's Ericsson, the world's biggest mobile networks maker, said on Monday it would not participate in the auctions for GSM gear being held by telecoms group BNSL.

Ericsson said the terms of the tender and the level of operating capital required had led it to decide against bidding in the auctions, announced earlier this year and valued at 20 billion rupees ($449 million).

An Ericsson spokesman said one of main reasons for opting not to join the tender was a demand that vendors give it access to hardware and software codes, despite Indian government guidelines on the issue not having been settled.

"The government's final decision is still pending so we felt we could not comply with such a requirement at this stage," Ericsson spokesman Paul Balaji said. "We also felt that there is a lot of capital employed over a significant period of time."

"It was a hard decision, all the more because we were the first vendor that set up the network where BSNL made its first GSM call," he added.

Bharat Sanchar Nigam Limited (BNSL) in May invited bids for GSM line equipment from Ericsson, Nokia Siemens and Alcatel-Lucent.

At first Chinese vendors were excluded from the tender due to security concerns, but the Indian government said last month that it had lifted these restrictions on BNSL's purchases of telecoms gear after concerns had been addressed.

Ericsson shares were down 1.75 percent at 1140 GMT, underperforming the European technology index which was down 0.4 percent.