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Minister approves BSNL’s reduced order

Minister approves BSNL’s reduced order

New Delhi: Union minister for IT and communications, Andimuthu Raja, has approved a proposal by the board of Bharat Sanchar Nigam Ltd (BSNL) to cut by half its GSM tender without modifying the contract or changing the eligibility criteria, according to a senior official at the state-owned telco. This could end uncertainty over the 18-month tender and help the telco meet immediate demand for its services.

The decks have now been cleared for the installation of 22.75 million GSM lines by LM Ericsson Telephone Co. and Nokia Siemens Networks. The contract, which includes around 6.1 million 3G or high-speed data lines, will be implemented in a 3:2 ratio by Ericsson and Nokia according to the terms of the tender.

“The minister has approved the proposal, signed it and sent it back to us," said a senior BSNL official who did not wish to be identified because he is not the authorized spokesperson for the company. Another official said the purchase orders would be “given any time now." On Monday, BSNL’s board had sent its observations to the ministry quoting legal advice from government lawyers, listing the reasons for the disqualification of Motorola Inc. and pleading its inability to alter the technical specifications of the tender mid-way.

The minister had sought to know the reason why the company had awarded the contract to the two vendors at $107 per line when another state-owned operator Mahanagar Telephone Nigam Ltd (MTNL) got similar contracts for $69 a line from Motorola. Raja also asked the company if it could remove the 3G component in the contract. “The order for the 3G equipment will be placed only after the government comes out with the policy (for 3G networks and offerings)," said the second official.

Meanwhile, speaking on the sidelines of a seminar, a senior Motorola official who did not wish to be identified said the contract it had won from MTNL could not be directly compared to BSNL’s controversial contract. “In the BSNL contract, a higher proportion of the towers are ground-based, raising the average cost per line. Also, only around a third of the MTNL lines are 3G-enabled, while in BSNL’s contract, it is roughly 50%," he added. Motorola had taken BSNL to court after its disqualification from the tendering process on technical terms and withdrew its case in May.

Both Ericsson and Nokia Siemens Networks refused to comment on the development, claiming that they are yet to receive any official confirmation from the government.

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