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Photo: Hemant Mishra/Mint
Photo: Hemant Mishra/Mint

BSNL’s move to exclude foreign vendors in 4G rollout a boost for local suppliers

  • The govt is of the view that locally manufactured equipment will make the country’s telecom sector self-reliant

The government’s decision to entertain only domestic telecom equipment makers for Bharat Sanchar Nigam Ltd’s (BSNL) 4G roll-out provides a boost to Indian manufacturers, even as it reduces India’s dependence on foreign vendors for mobile networks.

India’s telecom equipment market, which is largely dominated by global players such as Ericsson, Nokia, Samsung, Huawei, and ZTE, will soon see many domestic manufacturers entering it. State-owned BSNL has invited applications from Indian companies who can supply gear for rolling out 4G wireless service, department of telecommunications secretary Anshu Prakash said.

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BSNL’s initiative to allow local equipment companies bid for its 4G equipment after quality tests of their products will pave the way for players such as Tejas Networks Ltd and Sterlite Technologies Ltd, reducing India’s dependency on global firms, Prakash said.

“BSNL/MTNL 4G procurement is a great opportunity for Indian multinationals to manufacture and supply world class telecom network equipment…. The focus will be on commencement of 4G services by BSNL and MTNL in a time-bound manner using trusted and secure equipment," Prakash said.

Only companies registered and based in India can bid for BSNL’s 4G core network, the government said on Saturday. The notice said the core shall be Indian and the intellectual property right (IPR) or licence/copyright for the source code of the software should be owned by an Indian firm, and it must have unrestricted, irrevocable access and licence to modify the source code and provide software support for all future versions of the software.

Only Finland’s Nokia, Sweden-based Ericsson, South Korea’s Samsung, and Chinese firms Huawei and ZTE supply end-to-end equipment for wireless networks, while US-based Qualcomm Technologies Inc. and Cisco Systems Inc. are partly present in India.

The government is of the view that locally-designed and manufactured equipment, starting with BSNL’s 4G network, will make the country’s telecom sector self-reliant, which has been Prime Minister Narendra Modi’s goal since the beginning of the covid-19 pandemic. Companies such as Tata Consultancy Services Ltd and Tech Mahindra Ltd will have the opportunity to become major equipment suppliers as future telecom networks will be software-driven. Tejas Networks, which supplies gear for BSNL’s wireline network, plans to partner with such large system integrators for the telco’s wireless infrastructure, said Sanjay Nayak, CEO and MD, Tejas Networks. Nayak did not share the names of the companies it will partner to bid for BSNL’s 4G equipment. Tejas Networks, along with its partners, will submit a proof of concept (PoC), a written document proving the capacity and capability of products, as mandated by BSNL, he said.

“On the wireline side, we are already the bedrock for BSNL’s optical transmission network as around 80% of their live nodes are supplied by us. For wireless, we will partner with larger system integrators and offer our RAN (radio access network) equipment for 4G solution. This will provide the foundation for future upgrade to 5G rollout," Nayak said.

On 1 January, BSNL floated a new tender, inviting expressions of interest (EoI) for installation of around 57,000 4G sites across north, east, west and south zones. The quantum of procurement is yet to be announced by BSNL.

In July, the state-owned telco had cancelled its 8,697-crore 4G tender floated in March. Though the telco did not specify the reason for cancellation, the move was seen as a result of the India-China border standoff and the government’s think tank Niti Aayog’s suggestion to allow only domestically-manufactured equipment for BSNL’s 4G roll-out.

Prakash also said the cost of 4G spectrum for BSNL and MTNL will be met by the government through "equity support". The government will fund the spectrum cost through capital infusion of 20,140 crore. In addition to this, it will also bear the goods and services tax (GST) amount of 3,674 crore on the spectrum cost.

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