NEW DELHI, India—The fate of a 4.5 million line GSM tender floated by the government-owned BSNL hangs in balance as the governmental Department of Telecommunications (DoT) is insisting on price re-negotiation.
The three vendors shortlisted for the bid—Lucent, Ericsson and Motorola—have refused to scale down their bids for rolling out cellular services in 1,300 towns and cities across the country. Leading business newspaper The Hindu Businessline quoted sources saying this has been conveyed to the high-level committee of BSNL, which is renegotiating with the vendors on the insistence of Communications Minister Pramod Mahajan.
The minister ordered price renegotiation following allegations of “cartelization,” leading to an escalation in BSNL’s cellular project costs from the original 20 billion rupees (US$418 million) to more than 26 billion rupees (US$543 million).
The vendors said BSNL’s project budget did not take care of factors like stiff payment terms and foreign currency fluctuations, because most of the equipment is to be imported. Moreover, BSNL has included items, such as billing systems, Wireless Application Protocol (WAP), unified messaging service, subscriber identity module (SIM) cards, mobile handsets and countrywide coverage including all highways, in the scope of the tender.
The newspaper, quoting telecom officials, said the tender gives Ericsson, being a dominant player in GSM, orders for two zones, while Lucent and Motorola get orders for one zone each. The prices quoted by the three vendors are “similar.”
