BSNL scraps Rs 25,000 cr tender

Government-owned Bharat Sanchar Nigam Ltd (BSNL) on Friday scrapped a Rs 25,000 crore tender for procuring GSM equipment and installing network for 92 million lines. In its board meeting, the company also accepted Sam Pitroda Committee report.

Government-owned Bharat Sanchar Nigam Ltd (BSNL) on Friday scrapped a Rs 25,000 crore tender for procuring GSM equipment and installing network for 92 million lines. In its board meeting, the company also accepted Sam Pitroda Committee report.

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First reported by HT, the panel recommended scrapping the tender on the grounds that Ericsson was the sole bidder and hence, as per PSU rules, BSNL could not place orders with it.

This was world’s largest tender for buying GSM equipment.

The committee recommended that BSNL expand its network through "outsourcing infrastructure" model that is followed by the private telecom operators.

Under this model, a company outsources installation and maintenance of its network to equipment suppliers such as Ericsson and Nokia Siemens Network. The operator makes very little upfront payment to the equipment supplier. The payment is linked to the network usages. This means that an operator pays as it adds subscribers and earns revenue.

Trouble for the tender began when intelligence agencies disqualified the Chinese company Huawei from participating in the tender and Ericsson became the sole bidder. Government procurement norms do not permit a PSU to buy equipment from a single bidder.

Department of Telecommunications asked S Tel, a joint venture between Siva Group and West Asia-based Bahrain Telecom, to discontinue its mobile services on security grounds.

The company has not been given any notice period. S Tel CEO Shamik Das, said, "Yes, we received the letter a few hours ago.” DoT deputy DG (access services) A K Srivastava was not available for comments.