The Hindu Business Line : Delayed supply by ITI hits BSNL’s mobile expansion

New Delhi, April 16 Bharat Sanchar Nigam Ltd’s cellular expansion plans have hit yet another bump due to delays in equipment supply by state-owned Indian Telephone Industries. BSNL procures almost 30 per cent of its network equipment from ITI as part of a quota policy to keep the Government-owned factories functional.

“We are facing capacity crunch because of the delay from ITI. We have told them to speed up the supply in order to keep up with the growing demand for mobile connections,” said a senior BSNL official. ITI manufactures GSM equipment from its factories in Mankapur. ITI has a technology sharing agreement with Alcatel Lucent to manufacture GSM equipment in the country. Under a new contract, ITI was supposed to provide nearly 9 million new GSM lines to BSNL.

BSNL’s GSM project has been marred by repeated delays. First, the entire project was held up after Motorola contested BSNL’s decision to disallow the company from bidding.

Then, the Communications Ministry forced the PSU to reduce the contract size by half in a bid to bring down cost per line to less then $100. BSNL’s woes intensified further with Nokia Siemens, the second lowest bidder for the contract, walking away from the project on the grounds that the terms and conditions were changed after the bids were placed.

While private operators are adding over 1.5 million new mobile subscribers every month, BSNL is reporting between 5-7 lakh new users.

The Parliamentary Standing Committee on IT has also slammed ITI for the delays and has asked the Department of Telecom to find a solution whereby BSNL does not have to suffer because of the quota system.

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