India to Announce $9 Billion Network Contract on Wednesday

India's state owned Bharat Sanchar Nigam Ltd (BSNL) says that it will launch the tender for its 93 million mobile lines on September 10th. The contract is expected to be worth around US$9 billion, and has been delayed several times already.

"We will float a mega tender for 93 mn lines worth $9 bn," BSNL chief managing director Kuldeep Goyal told reporters. Notably, the price seems to have jumped sharply from the US$6.5 billion being talked about only a few months ago for the same quantity of network infrastructure. The company said recently that it had received a vast number of queries about the tender - and the public change in expected price may reflect the realities of the costs being offered by the network kit vendors.

As expected, about a quarter of the capacity will be set aside for 3G lines, with the rest for GSM capacity.

"We will start our roll out of 3G services in the northern and eastern zones by December this year," he added. "Orders have already been placed to procure equipment required for the roll out."

The original tender document stated that only companies with a turnover exceeding US$2 billion for the past two years and deployments of at least 20 million GSM lines - excluding any prior sales to BSNL - could participate in the contract bid. This did however still permit China's ZTE and Huawei to tender for the contract, both of whom had been refused permission to bid in earlier contracts.

While the contract is for 93 million lines, no one bidder will be able to win more than 50 million lines - and will be committed to offering replacement parts and maintenance for at least seven years. The tender document splits the allocation into four sections - three of 25 million lines for the North, West and South - with 18 million lines for the East.

A controversial clause which had required suppliers to be profitable has been removed as it would have excluded the likes of Motorola and Alcatel Lucent. Another clause was added though - requiring the bidders to have the ability to design/manufacture their own Radio Access Network kit - and not outsource that to 3rd party suppliers.

To fight growing competition, BSNL is looking to add at least 100 million GSM mobile subscribers by 2010. According to figures from the Mobile World database, the operator ended the first half of this year with some 37.36 million GSM subscribers - along with around 176,000 CDMA users.

Posted to the site on 7th September 2008