BSNL set stiff terms for 93 mn GSM lines tender
12 May, 2008, 0141 hrs IST,Joji Thomas Philip, TNN

NEW DELHI: State-owned BSNL has set a slew of stiff conditions for companies who want to participate in its Rs 40,000-crore tender for a record 93-million GSM lines.

The PSU has stipulated that only those companies who have a turnover of Rs 8,000 crore ($2 billion ) or above for the last two years, and have a successful track record of rolling out over 20 million GSM lines will be permitted to bid.

The maximum number of lines that a company would be awarded is 50 million. Prior to awarding contracts, BSNL will also enter into legal agreements which stipulate that the successful bidders provide spares, upgrades and services for seven years.

The $2-billion revenues condition implies that the bid will be restricted to global major such as Ericsson, Nokia Siemens, Motorola, Nortel, Alcatel-Lucent, Huawei and ZTE. Bidders are also not permitted to include previous contracts to BSNL when proving that they meet the 20 million GSM lines roll out criteria.

The BSNL contract will be split into three parts of 25 million each for the North, South and West Zones and 18 million for the East Zone. BSNL sources say that the PSU has already made it clear to all potential bidders that they will not be awarded more than two zones.

This implies that the maximum order than an equipment major can bag is for 50 million lines. Off the 93 million lines, about 21 million lines are reserved for third generation (3G) services. BSNL has added another rider which stipulates that successful bidders must provide proof of having setup between 2-5 million 3G lines across a minimum of two countries before they can bid for this project.

BSNL executives also said that the controversial condition that only profit making companies can participate in the tender has been done away with. This clause, which was incorporated into the company’s last tender, was amongst the factors leading to the disqualification of Motorola, as the US-based networks major had declared losses during several quarters leading up to its BSNL bid.

Successful bidders will also have to give an undertaking that they will manufacture the GSM EDGE Radio Access Network (GERAN), which forms the core of the networks equipment by themselves.

“This is to ensure that companies do not outsource or buy the most critical of the network components. It will also ensure that only firms that have an expertise in manufacturing these key products will bid. In the past tenders, we have seen that some of the winners were sourcing cheap radio access products from China,” a BSNL executive added.

Source:- Economic Times 12^th May’2008