DoT to flaunt success story in China

NEW DELHI: Ironically, just after the mega GSM project of Bharat Sanchar Nigam Ltd (BSNL) has been reduced to half, India’s success story in telecom will be shared with delegates from around the world at a symposium in Beijing this week.

“The country is adding 6 million to 7 million telecom subscribers every month and that’s a story that should be told to the world,” according to a government representative.

A delegation headed by the secretary, Department of Telecommunications (DoT), would attend a seminar on telecom and ICT policy and regulations, organised by Geneva-based International Telecommunication Union (ITU) on July 24 and 25.

As of May, China had 477.3 million and the US had 242.8 million mobile subscribers, against India’s 169.2 million.   Meanwhile, a DoT source told DNA Money that after halving the GSM tender, BSNL would be able to add capacity for about 18 months.

Besides the 22.75 million lines (2G and 3G) that have been cleared by communications minister A Raja for supply of equipment by Ericsson and Nokia in the 60:40 ratio, another 9 million lines would be catered to by the ITI-Alcatel combine. So overall, an addition of 31.75 million lines (in various phases) has been cleared.

If BSNL GSM network expands by over 31 million lines, the PSU could add over 1.5 million mobile subscribers every month, a source in the DoT explained.

However, Ericsson, which was the lowest bidder, and Nokia, which was the second-lowest bidder, are yet to say yes to the BSNL order.

While the Ericsson bid was for $107 per line, the cost has been reduced below $90 per line now. The vendors have time till July 28 to accept or reject the BSNL offer.

BSNL’s GSM growth has been slipping due to lack of additional capacity that is required for adding mobile subscribers. Two months ago, Vodafone Essar surpassed the BSNL subscriber base to become the number two GSM player. Bharti is the top GSM player. 

The GSM expansion plan of BSNL has been curtailed to 22.75 million lines from the original plan of 45.5 million lines. Last June, Ericsson had emerged the lowest bidder at $107 per line, and Nokia the second lowest at $177 per line in BSNL’s $4.8-billion GSM tender, for adding 45.5 million lines.

While 60%  of the contract was to be awarded to the lowest bidder Ericsson, the remaining 40% would have gone to Nokia, as per the original plan.  The GSM tender of BSNL has been revised more than a year after the bids for it were opened.

The review of the tender was kicked off by communications minister A Raja, who recently replaced Dayanidhi Maran.
According to Raja, the price quoted by the lowest bidder, Ericsson, at $107 per line was steep and that nothing more than $100 should be paid.