In the biggest ever expansion of mobile phone networks in India, state-owned BSNL Thursday invited bids for adding 45.5 million lines spread over three years, envisaging an investment of 4.5 billion dollar (Rs 20,000 crore).
The tender is the first step towards BSNL's massive expansion plan of 63.5 million GSM lines, out of which 18 million lines goes towards the PSU quota to ITI (and Alcatel combine) for the west zone.
Out of 45.5 million lines, 25 percent will be third generation mobile (3G services) compatible, and there is a possibility that it could be increased by 50 percent to 63.5 million, A K Sinha, CMD, BSNL said.
The 3G service hinges upon many factors, including the announcement of a spectrum policy. Availability of spectrum will offer BSNL's CellOne users high-speed data, voice and video on their phones.
Sinha said he hopes that clarity on spectrum policy will be there by June this year, paving the way for spectrum release.
S D Saxena, Director, Finance, BSNL said for financing the tender of Rs 20,000 crore, the PSU will borrow Rs 5,000 crore.
The two-stage bidding system will see 45.5 million lines being rolled out in three phases with 17.5 million lines in the first phase during which vendors can import their entire equipment in CKD and SKD form.
In the second phase, in which 14 million lines are to be deployed, the successful bidder has to manufacture about 30 percent of the core product in the country. In the third phase, another 14 million lines are to be deployed.
Stating that the lowest and the second lowest bidder (L1 and L2) will be distributed in the order of 60:40 across all the zones (East, South, North), Sinha said he expects the tender to be finalised in next 3-4 months and it may take 10 months after that to deploy the networks by the selected bidders.
Earlier J S Sarma, telecom secretary said: "To promote domestic manufacture, boards of BSNL and Mahanagar Telephone Nigam Limited have decided to insist on value addition in the country for their tenders."
When asked whether Chinese companies would be allowed to participate in the tender, Sarma replied in the affirmative.
On whether Huawei, which had defaulted on a contract to supply CDMA lines to BSNL, whould be disqualified from participating in the GSM contract, he said: "Not as yet."
Apart from domestic manufacturing, the vendor would be required to set up software centres in India for providing support during the lifetime of the equipment. "Remote access from a facility outside India shall not be generally allowed," the tender notice said.
Vendors having equity stake or operating partnership with any other cellular operator, except MTNL would not be allowed to participate in the tender. The successful bidders would have to give an undertaking that they would not enter into any such deal for the next two years.
