The Hindu Business Line : BSNL deals at current rates

Though BSNL is interested in choosing Ericsson, it may have to shell out more due to higher price quoted by the bidder. The Minister feels that the bid price is on the high side, given the fact that Motorola supplied similar equipments at lesser price.

Perhaps lower biddings are possible if the 3G component is dropped from the tender. BSNL may also have to reconsider the bids of Motorola and its Chinese partner ZTE, which earlier failed the technical evaluation tests.

T.S. Sundareswaran, New Delhi

The IT and Communication Minister has taken a correct decision by not letting the deal go through. First, it also sends the message that the department is active and vigilant.

Second, the incumbent Minister has to make sure that nothing spoils his reputation. However, the Minister, while considering the cost involved, should also think about the time involved in the review process.

Apart from this, though scrapping the 3G component reduces the cost, weakening of the rupee can be counter-productive.

Pulkit Soni, Indore

Though BSNL had invited bids and passed orders for supply of 2G and 3G equipments for expansion with concurrence of the Ministry concerned, the same Ministry has found that an extra Rs 10,000 crore has to be spent if BSNL goes ahead with the deal. Given the imbroglio, can one expect transparency in the deal?

Nagarajan Kumarasamy,

e-mail

Private GSM players could be the biggest unintended beneficiaries of BSNL’s problems. Analysts expect about 4 to 5 million BSNL subscribers to switch over to private players.

BSNL also stands to lose customer confidence on account of a temporary absence from the market place. Three to six months could change the very dynamics of the market place and private players will be the biggest beneficiaries.

The tender issue dates back to March 2006 to augment the capacity of BSNL and there were too many twists and turns in the entire process, which happens only in our country. The Communications Minister feels that the rates finalised are too high.

A delay was unavoidable in these circumstances. The Minister added that it was important to correct mistakes at any stage even if it held up development. But he was sure that there would be no serious breach of time lines that had been drawn up to increase the telephone density in the country.

But let us look at the other side of the coin. Perhaps for the first time in our country, a recognised trade union of a PSU had gone on a one-day token strike and threatened further action if a decision is not taken soon.

Obviously, something is amiss. Even letters to editors of some leading newspapers, written by ex-employees of BSNL including senior functionaries, indicate that the present controversy initiated by the Minister could have been avoided. It is time the board of BSNL sets the record straight.

Krithivasan, e-mail

The decision to defer finalisation of the tenders for 45.5 million lines of cell connections requires deeper examination for the following reasons: Negotiations with the lowest bidder will allow expeditious purchase of equipment and provisioning of lines.

According to reports; the average revenue per user (ARPU) currently is around Rs 202 per month. The revenue earned by providing the proposed 45.5 million lines will, therefore, be around Rs 920 crore per month, or Rs 5,520 crore for six months, and Rs 9,200 crore for 10 months. So the earnings lost by not providing the new lines will be of the above order.

An increase in the total number of connections by 45.5 millions is likely to expand the community of users and significantly increase the ARPU beyond Rs 202 per month. Increase of every Rs 100 per month of ARPU will increase the revenue earned by Rs 455 crore per month.

BSNL is a commercial organisation and its goal should be to rapidly increase the revenue. The bidders are highly reputed companies and re-tendering may not have the desired impact.

T. R. Anandan

Coimbatore

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