Top cos. vie for BSNL tender

By agencies   |   Tuesday, 13 June 2006, 07:00 Hrs
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NEW DELHI: The worldÂ’s top five telecom vendors have bid for the $4.8 billion tender for 45.5 million GSM lines being added by BSNL, IndiaÂ’s biggest telecom firm.

State owned Bharat Sanchar Nigam Limited, the telecom behemoth that has the country's third-largest mobile subscriber base, is rapidly expanding its networks to soak up demand in the world's fastest growing wireless services market.

"We have received five technical bids and they have been opened," the official, who declined to be identified, said. "We will now analyze techno-commercial bids."

The five telecom equipment makers that have submitted bids are Nokia, Ericsson, Siemens, Motorola Inc. and ZTE Corp., the official said.

India has the worldÂ’s cheapest call rates at just 2 cents per minute. This is wooing more than 4 million new cellular subscriber each month. This has put the total Indian cellular users base at 100 million, the fifth largest in the world.

BSNL had said in March the order for 45.5 million lines would be spread between two winners, and that some of the equipment would help BSNL offer data-intensive 3G services, mainly in the cities.

Additionally, BSNL will purchase 18 million lines from state-run telecoms gear maker ITI Ltd.

Galloping growth in the telecoms sector has been spurred by market-orientated government regulation and rising disposable income. The number of mobile customers now exceeds that of fixed-line users.
About a third of the equipment bid for in the tender, the largest ever in India, will have to be made locally as part of the government's strategy to boost domestic manufacturing of costly telecoms equipment.

As a consequence, Nokia and Ericsson have already boosted their manufacturing facilities in India. Last week, Motorola said it would invest $100 million in three stages to set up a handset and telecoms gear plant in the country.

Nearly 80 percent of the equipment used by Indian carriers is imported, draining away precious foreign exchange. Booming demand for equipment in the Indian market is crucial to most telecoms gear makers who face mature markets in many western countries.

Nearly half the equipment will be earmarked for rural areas, where two-thirds of India's billion-plus population lives but which is starved of quality telecom networks. More than a decade since being launched, mobile services are still largely city-centric.

BSNL competes mainly with larger rivals Bharti Airtel Ltd. and Reliance Communications Ltd., both of whom have a nationwide presence. Unlisted BSNL is present in 21 of the 23 zones that make up the country's telecom sector.

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