Barcelona Feb. 14

State owned Bharat Sanchar Nigam Ltd (BSNL) has awarded a 4 million line cellular contract to Nortel, Ericsson and Nokia at an estimated cost of $250 million. The move will enable the PSU to ease pressure on its network as its mega 60 million GSM line project is now stuck in the Courts.

Confirming the move, Mr Dayanidhi Maran, Union Communication and IT Minister, said while BSNL was capable of handling the crisis arising out of the Court case, it has now placed additional orders with the equipment vendors which had won the contract the previous time. As per the tender conditions, BSNL can give additional orders of up to 20 per cent to the existing vendors without going for a rebid.

Capacity Crunch

Mr Maran said that BSNL has a key role to play in the Indian telecom sector and it was because of the PSU that the tariffs were kept at such low levels. BSNL is facing a huge capacity crunch with its network running full capacity in most parts of the country.

The State owned telecom major was banking on the 60 million line project to plan an aggressive roll out. However, the project is now delayed by over 6 months after Motorola contested BSNL's decision to keep it out of the bidding process. Ericsson and Nokia had emerged as the two lowest bidders even as BSNL did not allow Motorola and ZTE to place their bids. However, the 4 million line contract will only allow the PSU only a marginal relief because the number of subscribers are growing at a scorching pace, which would utilise these new capacities within a matter of a few months.

Taken from Business Line

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