The Hindu Business Line : Vendors sore over supply deal for BSNL’s GSM project

Various IT equipment and billing solutions providers, including Sun Microsystems, Juniper and EMC, have written to the PSU stating that they have been given a rough treatment by Swedish major Ericsson, which is implementing the project.

The three companies have alleged that while Ericsson had included them for supply of various third-party services and products in the initial contract signed with BSNL, the Swedish company was now trying to ease them out in favour of other companies. For example, while a part of the IT solutions required for BSNL’s project was to be subcontracted to Sun Microsystems, it was now being given to HP. The companies have alleged that the move was against the terms of the contract, which had listed out their products initially.

While Ericsson officials were not available for comment, sources in BSNL said the crux of the problem was the order from the Ministry of Communications, which stipulated that the contract should be halved and the cost should be less than $100 per line. Ericsson had quoted $107 per line but the final contract was signed at around $90.

“Ericsson had listed out Sun Microsystems and other vendors based on the price it had quoted. Once the agreed price was much lower then it was expected that these vendors should also reduce their price. However, they have refused to reduce their price and therefore Ericsson is left with no option but to give the subcontract to other companies who are willing to give the same products and services at lower costs,” said a source close to the development.

They also said Ericsson had told these vendors that they could negotiate the subcontracts directly with BSNL.

However, the third-party vendors said that once a product mentioned in the contract was technically approved by BSNL’s evaluation committee then it could not be changed. They pointed to a previous instance when BSNL scrapped the entire contract related to National Internet Backbone Phase 3 after Wipro tried to bring in a product that was yet to be launched. The aggrieved companies are planning to hold a protest meeting with BSNL officials on Monday.

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