State-owned Bharat Sanchar Nigam Ltd (BSNL) is likely to halve the tender for 45.5 million phone lines awarded to Ericsson and Nokia-Siemens Network last year and order equipment with only second-generation telecom capabilities from them.
Second-generation (2G) telecom services are those offered by most mobile operators in the country now, but these cannot handle functions like high-speed Internet access and video streaming, which are part of third-generation (3G) services. The lowest bidder, Ericsson, will get 60 per cent of the BSNL order while the second lowest, Nokia-Siemens Network, will get 40 per cent.
A 2G equipment-only tender could bring down the cost to about $65-69 per line. This is based on the last order placed by Mahanagar Telephone Nigam Ltd and BSNL, respectively, for 2G equipment.
The meeting of the BSNL board on Monday, which will take up the issue, could turn out to be stormy one, as the interpretation of 50 per cent of the original tender has become contentious. It is also understood that a “quick bid” will later be called for 2G/3G equipment involving the four telecom equipment vendors that had reached the technical bid stage of the earlier tender.
"We have clearance in principle from our administrative ministry (communications) to place an order up to 50 per cent of the original bid. This will be in accordance with the tender norms. But there are other views as well. It could be 50 per cent of just the 2G component of the first phase," a senior BSNL executive said.
A clause in BSNL’s original tender provides: "BSNL reserves the right to order only 'up to' 17.5 million lines as required in the first phase.” Further while ordering for phases II and III, “BSNL reserves the right to restrict the order to 50 per cent of the tendered quantity of phase I, or full value".
The 45.5 million-line order had said the first phase (17.5 million lines) would have two components: 75 per cent (13.1 million lines) 2G and 25 per cent 3G.
According to BSNL executive, discussions last week with the legal team of the corporation yielded the view that if BSNL were to place an order for 13.1 million lines--and since its immediate requirement was 12 million lines--it would not be a violation of the tender.
Sources in BSNL said since the government had not yet announced the auction of spectrum for 3G services, a delay of a few months for another 'quick bid' tender that could go up to anywhere between 80 million lines and 90 million lines might not hurt the company’s rollout plans.