Part of BSNL 4G contract may be reserved for domestic companies

It's the govt's way of testing the waters to see if Indian firms can make telecom gear

The Department of Telecommunications (DoT) is looking at the option of splitting the Bharat Sanchar Nigam Limited (BSNL) contract for installing 4G equipment across the country.

It has suggested that BSNL should proceed with the existing expression of interest which was floated in January and is reserved exclusively for domestic vendors in consonance with India’s focus on ‘Atmanirbhar’ Bharat to install 50,000 radio access networks.

But the DoT says that BSNL should also plan, in parallel, to float another tender for the rest of the RAN (50,000) as per its usual tender rules which will be open to global telecom gear players such as Nokia and Ericsson.

The other option suggested is to keep one zone out of the five BSNL zones in which the 4G network will be installed reserved for Indian companies with an Indian core.

The remaining zones would be open for bidding by other players including global majors as per the normal procurement policy. But Chinese companies will face restrictions. Companies which have a border with India will need to register before they are allowed to bid.

The suggestion of splitting the contract is a mid-path for BSNL, part of the government’s desire to test the waters to encourage Indian companies to manufacture telecom gear. Seventy per cent of the $10 billion per annum spent by telcos on telecom gear is imported. Earlier the plan was to give the entire contract to an Indian player or a consortium. 

The suggestion emanates from concerns raised by BSNL that it might lose out in the mobile telecom race to private players and lose subscribers if there is any further delay in putting up the 4G network, already delayed by many years. The aim is to award the contract quickly.

Once, it even demanded compensation for the delay because of opposition from domestic players, which forced the government to cancel the tender. It is now demanding compensation again.

BSNL says that domestic vendors could take six to nine months to prove that their technology is proven and this delay would be disastrous for it.  

The government has clearly defined which are the Indian companies under the Expression of Interest which was floated in January who will be eligible.   

Eligible Indian companies have to be incorporated, registered and headquartered in India and should not be a subsidiary of another company which is headquartered outside India. They should have their global headquarters in India.

The core of the 4G network has to be provided by the Indian company and the intellectual property rights, licence or copyright of the source code of the core should also be owned by the Indian company.

It should also have irrevocable access and licence to modify the source code and provide software support for all future versions of the software.  

However, Indian companies have to demonstrate proof of concept of their products as their equipment is not proven. Nor do they have experience in installing it. It is only after they clear this test that will be eligible.

Several domestic players which include telecom gear makers as well as system integrators (IT companies such as Tech Mahindra, TCS and HCL Technologies) have shown interest to bid in a consortium.