The Hindu Business Line : Motorola withdraws case against BSNL award

New Delhi April 16 US-based telecom gear manufacturer Motorola on Monday withdrew its case filed in the Delhi High Court against a decision by Bharat Sanchar Nigam Ltd to disqualify the company from participating in the tender process for a $6-billion cellular infrastructure contract.

The move paves the way for BSNL to implement its massive mobile expansion plans to support 60 million new subscribers, which have been delayed by more than six months. Following the appeal from Motorola on October 9 last year, the Court had put a stay on the tendering process creating a huge crunch in the BSNL's network capacity.

Motorola said it withdrew the appeal in the light of the problems being faced by BSNL's subscribers.

Continued ties

"In view of the tremendous telecom growth taking place in the country and BSNL's petition of capacity constraints to have its share in this expansion, Motorola has decided to withdraw the case filed in the Delhi High Court. Withdrawal of the case by Motorola in no way reflects any change in the original position that its bid was in compliance with the tender conditions. Motorola looks forward to its continued partnership with BSNL and other customers to connect the un-connected," said a statement from Motorola.

BSNL officials said that the contract would be awarded within two weeks. "We thank Motorola for withdrawing the case. This was affecting our expansion plans considerably. With more than a million subscribers being added, it is important to have a network that can support that kind of growth," said Mr S.D. Saxena, Director (Finance), BSNL.

The move will also benefit Ericsson and Nokia who had emerged the two lowest bidders for 45.5 million lines after quoting $107 per line and $170 per line, respectively. The balance 15 million lines have been reserved under the quota system for the joint venture between ITI and French equipment manufacturer Alcatel.

`Good for telecom growth'

Mr P. Balaji, Vice-President (Marketing and Strategy), Ericsson India, said, "This is good for the growth of BSNL and India's telecom growth. Ericsson has been associated with BSNL ever since they started their GSM service and we hope to continue this relationship."

Once the final negotiations are concluded with BSNL, Ericsson could get the contract for 27 million lines estimated at about $3 billion while Nokia will get 18 million lines for about $2 billion.

Motorola sources added that the decision to withdraw the case was taken because it was beginning to strain the relationship between Motorola and BSNL and considering the number of fresh contracts being lined up by the PSU in the future. The US-based firm did not want to lose out on the opportunity,especially at a time when the company was not doing too well in the global telecom market.

Sources also pointed out that BSNL was digging out old projects where Motorola may have defaulted, to file a counter appeal against the equipment manufacturer. One such case has been filed by BSNL against Motorola in the Kerala High Court.

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