ZTE beats Huawei for BSNL tie-up

Telecom vendor Huawei Technologies has lost out to another Chinese equipment vendor, ZTE Corporation, in the race to form a 50:50 joint venture with Bharat Sanchar Nigam Ltd for manufacturing CDMA mobile handsets and fixed wireless terminals.

Following a tender, BSNL had earlier shortlisted both Huawei Technologies and ZTE Corporation as potential JV partners.

"We then followed a shortlisting exercise based on the Expression of Interest submitted by both the Chinese companies and chose ZTE for BSNL's first-ever joint venture," a senior BSNL executive told Business Standard.

BSNL has already initiated talks with ZTE to work out the modalities of the joint venture and the details would be announced soon, the executive said. The deal would involve technology transfer as well as transfer of machinery.

To begin with, the JV would include the manufacture of a million CDMA-based mobile handsets and an equal number of fixed wireless telephones. Company executives confirmed that the JV would initially manufacture from BSNL's unit in Kolkata.

Earlier in the year, BSNL's Kolkata factory had the received ISO 9001 certification from the Bureau Veritas India. At present, BSNL has seven units located in Mumbai, Kolkata, Gopalpur, Jabalpur, Bhilai and Kharagpur.

Losing the BSNL deal is yet another setback to the India operations of Huawei Technologies. Last month, BSNL had cancelled Huawei's contract to supply 1.05 million CDMA lines, which it had bagged it in partnership with Himachal Futuristic Communications Ltd and Semiconductor Complex Ltd.

The PSU then approached ZTE, as it had quoted the second best price (L2) for the CDMA project, but the latter declined the offer and said that it would not be able to match the price quoted by Huawei.