Home > General > BSNL to scrap GSM tender

BSNL to scrap GSM tender

Indian operator to abandon 93 million-line tender, sources claim.

Bharat Sanchar Nigam Ltd.’s board has decided to scrap the over $6 billion tender for supplying equipment for 93 million mobile phone lines on the global system for mobile communications, or GSM, platform, a person familiar with the matter said Friday.

The Indian sate-run telecom operator faces a scarcity of GSM lines in its bid to match the subscriber addition pace of bigger rivals such as Bharti Airtel Ltd., Reliance Communications Ltd. and privately held Vodafone Essar Ltd. In 2008 it issued a tender to set up 93 million additional lines.

“It [the decision to cancel the tender] was a decision taken by the board today. It was the only thing on the agenda,” the person, who didn’t wish to be named, told Dow Jones Newswires.

The decision came after a panel led by Sam Pitroda, adviser to the country’s Prime Minister–set up for the restructuring of BSNL–recently submitted a report to the government, which contained references to the GSM tender.

The panel asked BSNL to bring about changes in its procurement processes and procedures, if required, in consultation with the Central Vigilance Commission, the country’s federal corruption regulator.

Though further details were not divulged by the government, media reports said that the panel had also recommended cancelling the whole tender process.

The panel’s note followed a recent Economic Times report that the CVC had recommended that BSNL scrap the tender.

CVC was investigating alleged irregularities in BSNL’s tender, the report said.

The much-delayed tender had been mired in controversy right from the start, and got delayed due to various issues including legal and government directives.

First, telecom equipment maker Nokia Siemens Networks took BSNL to a local court after it was disqualified for the tender, as it didn’t meet “techno-commercial criteria.” An independent panel then cleared BSNL on its stand.

Among other bidders were L.M. Ericsson Telephone Co., Huawei Technologies Co, Alcatel-Lucent, ZTE Corp. and Nortel Networks Corp., BSNL had said last year.

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