The Hindu Business Line : Ericsson bags BSNL’s $1.3-b cellular contract

Moving ahead: The BSNL Chairman and Managing Director, Mr Kuldeep Goyal (left), and the Director (Finance), Mr S. D. Saxena, addressing a press conference in the Capital on Friday. - Ramesh Sharma

Our Bureau

New Delhi, Sept. 7 BSNL today awarded a $1.3-billion contract to Ericsson for supply of cellular infrastructure to support 13.1 million subscribers.

The move paves the way for BSNL to expand its network, which has been facing severe capacity constraints over the past few months.

This also puts an end to the controversy surrounding the tendering process, which began in October 2006.

Another contract for 9.6 million cellular lines is being given to Nokia. This will take the total project size to 22.7 million lines, half of what BSNL had initially planned. The per line cost has also been brought down to $90, compared to $107 quoted by Ericsson.

BSNL said that it hopes to add two million subscribers a month from January 2008. The company will float another tender for about 70 million lines by the end of the year. Under the agreement, Ericsson will also build a 3G mobile network for BSNL.

Deliveries will start in October 2007, with the first phase of the project set to be completed in 12 months.

Mr Kuldeep Goyal, Chairman and Managing Director of BSNL, said: “Upgrading our network will pave the way for a premium communications experience for our customers, and enable us to address new customer segments in a cost-efficient manner.”

Mr Mats Granryd, Country Manager of Ericsson India, said: “Ericsson is proud to have been selected for this landmark project, which will further strengthen our long-term relationship with BSNL. This deal is set to be a catalyst for future telecom growth in the dynamic Indian market.”

This is the second contract valued over $1 billion that Ericsson has bagged in the past three months.

The company has a market share of about 40 per cent in terms of connected subscribers, more than the combined market shares of its nearest two competitors.

BSNL will invest Rs 22,880 crore in 2007-08 for expansion of its telecom services.

About Rs 7,417 crore will go towards mobile services, while fixed, WLL and broadband and Internet will get about Rs 6,200 crore.

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