Ericsson, Nokia set to get $5-bn BSNL deal as Motorola relents

Telecom majors Ericsson and Nokia are set to bag a $5-billion tender floated by Bharat Sanchar Nigam Ltd (BSNL) for 63.5 million GSM mobile lines after another vendor, Motorola, decided to withdraw a legal challenge.

The Schaumburg, (Illinois)-based Motorola had moved the Delhi High Court on October 9, 2006 following its disqualification from BSNL’s tendering process on technical grounds. The court had restrained BSNL from awarding the contract.



BSNL chairman & managing director AK Sinha said the contract letter would be awarded by the end of April and the first phase of the rollout would begin by year-end.

In a statement, Motorola said, “In view of the tremendous growth taking place in the telecom sector in the country and BSNL’s petition of capacity constraints to have its share in this expansion, Motorola has decided to withdraw the case filed in the Delhi High Court.” It, however, clarified that the withdrawal did not reflect any change in its original position that its bid was in compliance with the tender conditions.

Sweden’s Ericsson had emerged the lowest bidder in the 45.5-million GSM lines tender, quoting about $107 per line, followed by Finland’s Nokia, which quoted about $177 per line.

Under the BSNL tender, the lowest bidder gets 60% of the contract while the second lowest bidder gets the remaining 40% at the lowest quoted price. Another 18 million lines is reserved for state-owned ITI Ltd, which has a tie-up with French major Alcatel.