Ericsson awaiting response from BSNL

New Delhi, July 18 (UNI) Swedish telecom major Ericsson today said it is eagerly awaiting response from state-owned BSNL to lay 45.5 million GSM lines which is under a cloud of controversy after a recent intervention from the Telecom Minister over the procurement of tender.

''We are patiently waiting for the response from the BSNL,'' Ericsson India Director Mats Granryd told reporters in a conference here.

When asked about the price renegotiations for the order, Mr Granryd declined to comment.

BSNL had invited tenders for 45.5 million GSM lines, both 2G and 3G, where Ericsson and Nokia had emerged as the lowest bidders at 107 dollar and 176 dollar per line respectively.

Telecom Minister A Raja asked the BSNL to negotiate a lower price, arguing it would be paying substantially more for the equipment than another state-run firm.

BSNL has conveyed its decision to Raja, who is expected to take a final view in a day or two.

Sources say that the Ministry is likely to cut by half the GSM lines for 3G services and will also add focus on 2G or normal voice services.

The deal which was caught in the eye of a storm triggering dissent among employees who had struck work has gone to Ericsson after Motorola and its Chinese combine ZTE were disqualified.

''We may even begin a fresh process,'' a BSNL source said on the likelihood of a re-bid after the Minsiter called for a relook at the Ericsson tender.

The tender was the outcome of a more than year-long process under which four foreign firms, including Nokia, Ericsson, Siemens and ZTE, were to collaborate with BSNL in expanding its technology and machinery for setting up six crore additional GSM connections.

The tender was first put up in October 2005, with decision taken regarding tender conditions and appointment of an empowered committee. The excerise was called in May 2006 and parties submitted their bids in the following month.

Due to certain technical reasons one of the bidding parties, Motorola, was barred from participating in the tender process, which made Motorola approach the Delhi high court and obtain a stay in the proceedings. Later in April this year, Motorola withdrew its petition and the tender process was resumed.

Mr Raja had asked BSNL to negotiate for a lower price and had to drop the 3G component from the deal as there is no 3G policy with the government. In this case, BSNL will have to reconsider the bid with Motorola, which was reportedly rejected on the grounds that the US company did not have expertise in 3G.

BSNL, the country's largest telecom company is currently facing equipment shortage and have been steadily losing market to rivals who are mostly private players like Reliance and Airtel.

UNI