Vendors Refusing to Supply Gear to BSNL

Vendors selected by BSLN to supply equipment to its 14.37 million line network expansion plan have not given the items to the company at the price quoted by the lowest bidder, China's ZTE. After looking at multiple companies, BSNL has selected equipment vendor ZTE, Huawei (News - Alert), Alcatel Lucent, Ericsson and Nokia Siemens Network (NSN). 

According to a press release, in July 2011, BSNL (News - Alert) had invited vendors to submit bids for its expansion plan and had issued advance purchase orders to these vendors which gave them a chance to supply equipment at the price quoted by ZTE (News - Alert). A senior BSNL official today said Huawei, Alcatel Lucent, NSN and Ericsson have refused to match the price quoted by ZTE, but added that the expansion will continue anyway. 

"The tender has a provision to deal with such a situation and action is being taken accordingly. There is absolutely no problem in this regard," the BSNL official added. “We have started upgradation for our systems. Recently, we upgraded billing system of landline services to real-time call data record billing system with an estimated cost of around Rs 800 crore. We are determined and this (14.37 million lines) will also continue," he said. 

BSNL obtained the permit to start mobile telephony in 2001, which was five years after the mobile services were started in India, and since then has marched ahead as a leader in the market. However, a shortage of equipment hampered the performance of company. With over 98.51 million customers at the end of March, 2012, BSNL had a 10.72 percent market share in the mobile telephony space. 

BSNL's last tender was finalized in 2006 for 45 million lines, which was later reduced to 14 million lines in 2007.  This then prompted the company to submit two more tenders for 93 million lines in 2008 and 5.5 million lines in 2010, with both tenders later being cancelled.