Networking vendors vying for BSNLs Rs 500 cr order

 Global network vendors Ericsson,Alcatel-Lucent, Huawei and ZTE and two Indian suppliers -- Hyderabad-based Prithvi Information Solutions Ltd (PISL) and Sterlite Group -- are in the race to sell Rs 500 crore of telecoms equipment to state-run BSNL for upgrading its countrywide landline network, two executives aware of the development told ET.

The telecom PSU, which controls 70% of India's wireline turf, will shortly select two vendors for replacing its 38,000-odd fixed-line exchanges with next generation network equipment to transform BSNL's landline experience and future-proof the network.
Bulk of its existing exchanges run on C-DoT technology while the rest are imported units, classified as "old tech". "Six telecom gearmakers, including two Indian companies have submitted bids and we will shortly finalise two suppliers," said a top executive, adding that the landline exchanges are being upgraded to roll out a slew of broadband and value-added services for BSNL's wireline subscribers, including free call transfers from mobile to landline when a subscriber is home.

Chinese telecom gearmakers ZTE and Huawei are learnt to have emerged frontrunners, but BSNL may meet 30% of its landline network gear requirement from an Indian supplier in line with the government's preference for domestically manufactured telecom gear for security reasons.

The telecoms department has asked PSUs to buy a fixed quantum of network gear from local suppliers at a time when India is increasingly ramping up indigenous capacity to churn out electronic telecoms gear and software being inducted into telecom networks. But the government's stress on indigenous telecom gear capacity scale-up and mandatory procurement from local suppliers is unlikely to scupper the prospects of international vendors in ministerial or PSU tenders since the likes of Ericsson, Alcatel-Lucent, Huawei and ZTE have manufacturing lines in India.

The loss-making telco is exploring ways to recharge its beleaguered wireline business, which accounts for over 60% of its 2.7 lakh workforce. Network modernisation is slated to give a fresh lease of life as landline subscribers will be able to get more bang for the buck from their fixed phones by way of services, especially at a time when BSNL's wireline revenues have dried up and its landline subscriber base has plunged to under 22 million from 34 million four years ago.

BSNL executives also claimed that investing about Rs 500 crore in its landline network would ring in sizeable cost savings on the operations & maintenance (O&M) front, especially since the telco's losses in 2011-12 have widened to Rs 8,850.70 crore and revenue has shrunk from a peak Rs 39,715 crore in 2006-07 to Rs 27,933.5 crore in 2011-12.