With Motorola having decided to withdraw its legal challenge to the award of BSNL''s contracts that eliminated it in the bid process for supply of equipment to BSNL in October 2006 (See: Ericsson, Nokia oust Motorola to emerge lowest bidders for BSNL''s GSM tender), Ericsson and Nokia are set to bag the Rs22,000 (approximately $5-billion) contract.

Motorola today said that it was withdrawing its case and looked forward to its continued partnership with BSNL. The US firm said the withdrawal did not reflect any change from its stand on the tender award.

Five global telecom equipment suppliers - Ericsson, Nokia, Motorola, Siemens and ZTE Corp - had submitted financial bids for the BSNL tender, out of 18 who had shown an interest. Later, Motorola and ZTL Corp had been eliminated during technical evaluation.

Motorola filed a case in the Delhi High Court on Monday against BSNL, seeking an explanation for its disqualification. Motorola also questioned the move to allowing Nokia and Siemens to bid separately even though the two companies are being merged.

Bids for the 45.5 million GSM lines contract were ordered by the court to be put on hold.

In February 2007, Motorola turned down BSNL''s offer to reserve 60-per cent of the contract pending the court judgement and be allowed to award the remaining contract (See: Motorola turns down BSNL''s offer on cellular contract)

With Motorola''s decision to withdraw its legal challenge, Ericsson, which emerged the lowest bidder at $107 per line will get 60 per cent of the contract, followed by Nokia getting the rest.

BSNL, India''s top telecom company and third largest cellular company, which has a presence in 21 of the 23 telecom circles, has been facing a critical shortage of GSM equipment that has led to it being overtaken by private sector rivals Bharti Airtel Ltd. and Reliance Communications Ltd, both of whom have presence in all the 23 circles.