Business Daily from THE HINDU group of publications
Monday, Aug 13, 2007
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Telecommunications Info-Tech - Alliances & Joint Ventures BSNL tender: Ericsson sets terms for lowering price
While Ericsson quoted $107/line, BSNL has offered to give around $90/line. BSNL also reduced the overall contract size by half. Purchase order to Nokia can be given only after finalising Ericsson’s contract.
Thomas K. Thomas New Delhi, Aug. 12 The agreement for supply of 14 million cellular lines between Bharat Sanchar Nigam Ltd and Ericsson is not a done deal yet with the latter putting conditions for accepting the purchase order at a lower price. While Ericsson had quoted $107 per line, BSNL has offered to give around $90 per line. BSNL has also reduced the overall contract size by half. According to sources in BSNL, the two companies are still negotiating the contract with BSNL on the one hand wanting free software bundled with the equipment and on the other, Ericsson wanting to drop certain components from the bill of material to justify the lower price. BSNL CONFIDENT
When contacted, BSNL officials admitted that the contract has not yet been signed and discussions were still on. “We are trying to convince Ericsson to agree to the terms and conditions. This is a normal process as the vendors are bound to have doubts given that we changed the contract terms. We are confident of concluding the deal shortly,” said a senior BSNL officer. Ericsson officials were not available for comment. Earlier, Ericsson sources had said that it was accepting BSNL’s revised contract. BSNL has not yet given Nokia the advance purchase order due to the delay in signing the deal with Ericsson. The purchase order to Nokia can only be given after the contract with Ericsson is concluded. The total contract is for 23.5 million lines. Cause for delay
This project, which was initiated in early 2006, has been delayed by more than eight months. It was first held back after Motorola legally challenged BSNL’s decision to disqualify it from the bidding process in October 2006. Six months later, with an eye on future BSNL contracts, Motorola withdrew the case. The contract ran into further trouble after the Communication and IT Minister raised questions on the processes followed by BSNL during the bidding process. After two months of negotiations, in July, the BSNL board decided to give the purchase order to Ericsson. The contract has not yet been finalised despite Ericsson on August 2 stating that it was accepting the purchase order. The BSNL Union had given the Government time till September to finalise the mobile expansion plan.
Related Stories: Ericsson accepts BSNL order for GSM equipment Ericsson bags two BSNL contracts BSNL to float fresh tender for 75 m mobile lines BSNL union defers strike till September More Stories on : Telecommunications | Alliances & Joint Ventures
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