BSNL to invite bids for second phase of upgradation

05 January 2006

Bharat Sanchar Nigam Ltd. (BSNL) will be inviting the much-delayed bids next week on the second phase of a cellular upgrade contract that will be worth around a whopping $4 billion.

International infrastructure vendors are expected to make a killing with this deal, inviting bids for 60 million GSM lines.

BSNL had originally planned to issue the contract in two parts — one for 40 million lines, and another for 20 million in 2007, but has now decided to award the whole lot in one go. It also plans to set aside 25 to 30 per cent of the lines for 3G.

The sheer size of the deal has plenty of vendors positioning themselves to grab a piece of the pie. Alcatel has recently opened a second GSM base station production facility with its local partner, ITI Ltd. , Ericsson AB has upgraded its base station facilities, while Nokia Corp. was recently awarded another GSM expansion deal from BSNL.

The rapid growth of the cell phone sector comes from the fact that over 3 million subscribers are added every month to the telecom services market. BSNL's subscribers number 14 million, including the one million mobile joining in, in December. At present the mobile networks cover just a third of the country, with Mahanagar Telephone Nigam Ltd. (MTNL) planning to invite bids on a contract for 4 million GSM lines.