NEW DELHI—Motorola Inc. scored a glimmer of hope in India as a court there issued an injunction that temporarily stops India’s state-owned Bharat Sanchar Nigam Ltd. from awarding its multibillion-dollar network expansion contract to eager vendors.
Motorola had asked the Indian court for a stay in early October after being ousted from BSNL’s bidding process for alleged “technical deviations.”
The Indian carrier’s contract involves doubling the size of its GSM-based network. The contract could be worth around $5 billion—a substantial sum of money for winning vendors.
Media reports indicate that the likely contract winners are L.M. Ericsson, expected to nab around 60 percent of the contract, and Nokia Corp., which probably will snag the rest of the deal.
Though BSNL was quoted in the Indian press in October as having dismissed Motorola and ZTE Corp. from the bidding process due to technical shortcomings, rumors have circulated in the press indicating that BSNL’s decision came down to security concerns about doing business with Chinese vendors. Motorola apparently had planned to source some equipment from China-based Hauwei Technologies Co. Ltd. ZTE is based in China. BSNL has denied the rumors.
Media reports have also pointed to the mechanics of BSNL’s bidding process, which apparently specifies that the lowest bidder takes home 60 percent of the contract and the second-lowest bidder gets the remaining share of the contract at the same price offered by the lowest bidder. Ericsson is said to have bid $107 per line, while Nokia is said to have bid $177 per line. However, Motorola has contended that its bid was lower than Nokia’s.
Motorola said in October that it was disappointed over its sudden disqualification in the network equipment tender.
“As a company committed to the highest levels of transparency in all tenders we participate in, Motorola India is surprised and extremely concerned by the BSNL decision not to invite us to continue in the price bid opening for its GSM and 3G equipment tender,” the company said in an October e-mail to RCR Wireless News.
“Motorola has regularly been in discussions with BSNL ever since it invited technical discussions and has responded positively to all the technical queries raised by BSNL. As recently as a week ago, Motorola provided compliance undertakings on various requirements desired by BSNL. At no point in time was Motorola communicated that its bid was being dropped due to technical reasons.”
A hearing in the issue is scheduled for Nov. 16, but even if Motorola gains any legal ground, it is unlikely that the company’s success in court will translate into any substantial contract revenues. BSNL has already laid its cards on the table, indicating that it would prefer to do business with Ericsson and Nokia. Any actions that are forced upon the carrier by the courts likely will only hurt Motorola’s relationship with the carrier.
BSNL is the only Indian carrier to offer both traditional landlines and wireless service across the country.
BSNL could not be reached for comment, while Motorola and ZTE didn’t respond to requests for further details.
