Ericsson, Nokia set to clinch $5-b deal

Motorola Withdraws Petition; Decks Cleared For BSNL’s GSM Plan

US-BASED telecom major Motorola has withdrawn a petition challenging its disqualification in the 45.5 million lines GSM tender issued by stateowned Bharat Sanchar Nigam (BSNL), thus paving the way for implementation of one of world’s largest telecom equipment contract. Ericsson and Nokia, which had emerged as the lowest bidders, are now set to clinch the $5 billion contract from BSNL. The Delhi High Court on Monday dismissed Motorola’s application as withdrawn. “In view of the tremendous growth taking place in the telecom sector in the country and BSNL’s petition of capacity constraints to have its share in this expansion, Motorola has decided to withdraw the case filed in the Delhi High Court,” Motorola said in a statement. It may be recalled that Motorola had filed a petition in Delhi High Court on October 9, 2006, challenging its disqualification in the 45.5 million lines tender. Following this, BSNL was unable to place any order during the pendency of the petition. The award, which had gone to Ericsson and Nokia would now be implemented with the withdrawal of this petition. Ericsson, which was the lowest bidder, would get 60% of the 45.5 million lines while the second lowest bidder — Nokia— would get the remaining share of the northeast and west zone. Motorola had earlier challenged the award of the contract to Ericsson saying it was the lowest bidder and BSNL had wrongfully disqualified it on the technical evaluation ground. When contacted, BSNL director (finance) SD Saxena said that the order would be placed in the next 15-20 days. “We will try to make up for the lost time by giving more connectivity as soon as possible,” Mr Saxena said. Ericsson India V-P (marketing & strategy) P Balaji told ET, “This is good for BSNL’s growth and India’s telecom sector. We cherish our association with BSNL since the launch of their GSM services and look forward to further strengthening our relationship.” BSNL’s subscriber addition had taken a hit, as the operator had exhausted its capacity in certain circles. Considering that it takes around three months for the first batch of equipment to arrive after an order is placed, BSNL’s plans should be back on track in the next 3-4 months. In its statement issued on Monday, Motorola, however, pointed out that the withdrawal did not reflect any change from its original stand on the tender award. “Withdrawal of case by Motorola in no way reflects any change in the company’s original position that its bid was in compliance with the tender condition,” it said. “BSNL is a valued customer and the company looks forward to its continued partnership with BSNL and other customers to connect the unconnected,” Motorola said. Motorola was disqualified on technical grounds on October 7, just two days before the opening of financial bids. The equipment supplier later challenged the decision in the Delhi High Court.

INDIA TALKY

BSNL, formed in October, 2000, is world's seventh largest telecommunications company Services provided by it include wireline, CDMA mobile, GSM mobile, Internet, broadband, carrier service, MPLS-VPN, VSAT, VoIP services, IN services It connects 602 districts, 7,330 cities/towns and 5.5 lakh villages BSNL cellular service, CellOne, has more than 17.8 million customers, ie 24% of all mobile users. It has 35.1 million basic phone subscribers ie 85% share of the subscriber base and 92% share in revenue terms Its infrastructure asset on telephone alone is worth about Rs 63,000 crore ($14.37 billion). BSNL plans to expand its customer base from present 47 million lines to 125 million lines by December 2007 and infrastructure investment plan to Rs 733 crore ($16.67 million) in the next three years.

Courtesy: EconomicTimes