labels: telecom, motorola, bharat sanchar nigam ltd
Raja advises BSNL to drop 3G stipulation; DoT questions Motorola''s disqualificationnews
09 July 2007

IT and Communications Minister A Raja today said he has advised state-run BSNL to drop the 3G component from its 45.5 million line GSM tender, citing the lack of a policy for implementing third generation network.

If BSNL were to take the minister''s advice, the public sector company may have to reconsider disqualification of US equipment supplier Motorola and its Chinese partner ZTE from the tender - a quarter of which was for rolling out 3G lines.

He, however, said it was for BSNL''s board to decide whether or not to go with the suggestion.

BSNL had selected Sweden''s Ericsson and Finland''s Nokia for executing the contracts, while disqualifying Motorola on the ground that it did not have any expertise in 3G networks.

The department of telecom is believed to have questioned BSNL''s decision to disqualify US telecom company Motorola from participating in the financial bid.

Telecom minister A Raja, who replaced Dayanidhi Maran, is said to have written to BSNL seeking the reasons for Motorola''s disqualification. The US-based telecom equipment firm had also challenged its disqualification in the Delhi High Court, which it later withdrew.

BSNL, which faces an acute shortage of GSM equipment that resulted in it losing market share to private sector rivals, had floated the biggest ever tender by any telecom company for 45.5-million lines, creating a high-stake opportunity for all contenders.

According to the tender conditions, two bidders would be selected. The lowest bidder would get 60 per cent of the contract while second lowest would get the remaining 40 per cent.

Five top telecom equipment suppliers that also included Ericsson, had submitted financial bids for the BSNL tender, out of the 18 which had shown an interest. The others four were Nokia, Motorola, Siemens and ZTE Corp.

The technical evaluation of all the five bidders had been completed at the end of Ocitober 2006. Of these five only three -Nokia, Ericsson and Siemens qualified for meeting the criteria.

Ericsson had emerged the lowest bidder quoting about $107 per line followed by Nokia quoting a price of $160 a line.

Motorola''s financial bid was not considered, as it did not have experience in third generation (3G) telephony even as policy for 3G licensing as well spectrum is still not in place.

DoT said Motorola had offered a price of about $70 a line to MTNL for the mobile telecom services (not 3G) and taking the same benchmark BSNL, had it allowed Motorola to participate, would have saved a large sum of money.

Sources said some of the private players in the telecom equipment industry including MNCs were in touch with the BSNL employees unions to ensure that orders were placed with the two successful bidders. BSNL employees union has given a strike call on July 11 to implement the tender.

The gross subscriber base (wired and wireless) has eventually crossed the 200 million mark - much earlier than what may analysts had expected.

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Raja advises BSNL to drop 3G stipulation; DoT questions Motorola''s disqualification