BSNL to extend $500 Million GSM deal with Ericsson

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BSNL to extend $500 Million GSM deal with Ericsson
Bangalore: BSNL has decided to offer an extension contract of its GSM project to Swedish equipment manufacturer, Ericsson. As part of the contract, which is worth $500 million, Ericsson will supply GSM equipment for supporting 5.25 million subscribers, reports Business Line.

Ericsson will have to offer the equipment based on the price it quoted in 2007 under phase-5 of BSNL's GSM roll out. It is not yet known whether Ericsson will accept this contract since it is among the two short-listed vendors for the 93-million-line project worth about $6.2 billion (30,000 crore). Chinese manufacturer of telecom gears, Huawei is the other player which has been shortlisted.

As per the procurement policy of BSNL, it can ask existing vendors to supply 50 percent of the previous contract without going for a new tender. BSNL's GSM rollout has been severely affected after its last two tenders ran into trouble. While the first tender delayed BSNL's plans by at least a year after Motorola took it to court, the 93-million-line contract has hit multiple blocks. While on one hand Nokia Siemens has challenged BSNL's decision to disqualify it from bidding, on the other hand, the government has cautioned against buying equipment from Chinese players.

According to BSNL officials, the additional contract to Ericsson is an interim measure to meet the capacity demand. However, the hitch here could be that Ericsson had to take the contract in 2007 for about $100 (about 5,000) a line compared to 7,000 a line it has quoted for the 93-million-line project.

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