BSNL lowers price, will buy 14 M 2G lines

By SiliconIndia   |   Wednesday, 18 July 2007, 07:00 Hrs
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New Delhi: Bharat Sanchar Nigam Ltd (BSNL) will be buying 14 million second generation (2G) mobile lines at an estimated per line cost of Rs 3,537, lower than the Rs 4,965 per line quoted by Ericsson, the lowest bidder for the full order of 45.5 million lines says Business Standard. The whole order had included both 2G, the currently used technology, and third generation (3G) lines (used for high-speed mobile Internet access).

Once the government finalizes the spectrum policy for this yet-to-be launched service in the country, another 3.5 million lines supporting 3G mobility will be bought. With this purchase, BSNL's bill for the equipment will stand at Rs 4,952 crore which is considerably lower than the original bid of Rs 22,595 crore quoted by Ericsson for 45.5 million lines.

The BSNL board has received approval from its legal counsel and the additional solicitor-general of India for this decision. BSNL will also correspondingly reduce the value of the bank guarantees submitted by the vendors.

Communications Minister A Raja will take a final view on the BSNL's decision. If approved, BSNL can go ahead and place the order with Ericsson and Nokia. The other contenders, U.S.'s Motorola and China's ZTE, which had been disqualified from the earlier tender, may not be invited to re-bid.

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