The Hindu Business Line : Ericsson declines Nokia portion in BSNL deal

Hangs in balance
Nokia Siemens part of the project was supposed to be for around 9 million GSM lines at a cost of $910 million.
Ericsson had agreed to supply 60 per cent of the 22.5 million cellular line project at about $90 per line.
As per revised tender, while Ericsson had quoted $107, Nokia Siemens was ready to offer the equipment at $170 per line.

Our Bureau

New Delhi, Dec.10 Bharat Sanchar Nigam Ltd’s controversial GSM project has run into more trouble.

Swedish major Ericsson has decided against accepting the entire contract of 22.5 million GSM lines from the State owned company. Ericsson, being the lowest bidder, was given the full contract after the second lowest bidder — Nokia Siemens — walked out of the project citing pricing issues.

Ericsson has now decided to take up only 60 per cent of the contract as was planned initially. This means that BSNL will have to find another vendor to set up the balance 40 per cent of the network.

Senior BSNL officials said that the company was already in talks with some of its existing equipment vendors such as Motorola and Nortel to expand their order.

The Nokia Siemens’ part of the project was supposed to be for around 9 million GSM lines at a cost of $910 million. The company had withdrawn from the project on the grounds that it could not supply equipment for mobile services at the price agreed to by the lowest bidder for the contract-Ericsson.

Swedish equipment major Ericsson had agreed to supply 60 per cent of the 22.5 million cellular line project at about $90 per line.

Nokia had expressed concern at the revised tender conditions. The tender size was reduced by half from the initially planned project of 45 million lines after the Communication Ministry raised doubts over the process followed by BSNL. The Ministry also insisted that the price per line will have to be less than $100.

While Ericsson had quoted $107, Nokia Siemens was ready to offer the equipment at $170 per line. This meant that Nokia would have had to lower its quote by almost half if it wanted to get the contract.

BSNL’s GSM project, initially envisaged for 45 million subscribers, had been in limbo for more than a year. The contract initially got stuck in litigation when Motorola challenged the PSU’s decision to disqualify it from the bidding process.

It hit another major block when the Communication Ministry intervened and asked the company to revise the contract both in terms of size as well as price.