BSNL bans China's Huawei, ZTE from bidding
Wednesday, 26 May 2010
India’s state-owned BSNL has banned Chinese vendors Huawei and ZTE from bidding for its Rs 20 billion contract for supply of 550 million GSM lines for its Northern and Eastern zones.
BSNL has specified that only three Western vendors - Ericsson, Nokia Siemens and Alcatel Lucent - can participate in the bidding process, according to a report of India's Economic Times.
"It is a fact that telecom gear from Western vendors are expensive when compared to Chinese vendors, but a government directive prevents us from placing any orders with telecom gear makers from China, especially if the equipment has to be installed in circles that share international boundaries," BSNL chairman and managing director Kuldeep Goyal told ET. He also added that BSNL board had cleared the new tender, limiting the participation to the three Western vendors, last week.
This is also the first tender the PSU has floated after it cancelled its 93- million lines contract, the world's largest for telecom equipment, earlier this year. Following the junking of the 93-million lines contract, which had run into several controversies - including court cases and a probe by the Central Vigilance Commission - BSNL had decided to do away with its tender-based equipment procurement process and adopt the 'managed capacity model' followed by the private telcos.
But, as reported by ET last week, BSNL's plans to move to a managed capacity model have found no takers in the government. The communications ministry (in a letter dated May 10 to BSNL) has told the PSU that its plans to outsource the building, management and maintenance of its networks to global equipment majors may pose a 'threat to national security'. The note added that since the government relied on BSNL's networks during times of external aggression and internal disturbances, the telco should not compromise on the security factor. The telecom department has also told BSNL that it can only approve a new procurement model after studying the security angle.
"The telecom commission - the apex decision making body of the DoT - has not approved our plans to adopt a managed capacity model. In the interim, we have gone back to the earlier procurement process of awarding tender-based contracts," Mr Goyal said. He also added that with global prices for telecom equipment dipping, vendors were likely to bid well below Rs 3,000 per line.
Prior to junking its 93-million lines contract, BSNL had awarded a fourth of this to China's Huawei for the South Zone. The Chinese vendor was also the lone short-listed telecom gear maker for the West Zone, but BSNL could not award the contract since the regions shared international boundaries.
BSNL has specified that only three Western vendors - Ericsson, Nokia Siemens and Alcatel Lucent - can participate in the bidding process, according to a report of India's Economic Times.
"It is a fact that telecom gear from Western vendors are expensive when compared to Chinese vendors, but a government directive prevents us from placing any orders with telecom gear makers from China, especially if the equipment has to be installed in circles that share international boundaries," BSNL chairman and managing director Kuldeep Goyal told ET. He also added that BSNL board had cleared the new tender, limiting the participation to the three Western vendors, last week.
This is also the first tender the PSU has floated after it cancelled its 93- million lines contract, the world's largest for telecom equipment, earlier this year. Following the junking of the 93-million lines contract, which had run into several controversies - including court cases and a probe by the Central Vigilance Commission - BSNL had decided to do away with its tender-based equipment procurement process and adopt the 'managed capacity model' followed by the private telcos.
But, as reported by ET last week, BSNL's plans to move to a managed capacity model have found no takers in the government. The communications ministry (in a letter dated May 10 to BSNL) has told the PSU that its plans to outsource the building, management and maintenance of its networks to global equipment majors may pose a 'threat to national security'. The note added that since the government relied on BSNL's networks during times of external aggression and internal disturbances, the telco should not compromise on the security factor. The telecom department has also told BSNL that it can only approve a new procurement model after studying the security angle.
"The telecom commission - the apex decision making body of the DoT - has not approved our plans to adopt a managed capacity model. In the interim, we have gone back to the earlier procurement process of awarding tender-based contracts," Mr Goyal said. He also added that with global prices for telecom equipment dipping, vendors were likely to bid well below Rs 3,000 per line.
Prior to junking its 93-million lines contract, BSNL had awarded a fourth of this to China's Huawei for the South Zone. The Chinese vendor was also the lone short-listed telecom gear maker for the West Zone, but BSNL could not award the contract since the regions shared international boundaries.