Huawei escapes BSNL ban as DoT fails to take call

Chinese vendor remains eligible to bid for BSNL's mega tender.

Chinese equipment vendor Huawei Technologies has escaped a possible three-year ban and blacklisting by Bharat Sanchar Nigam Ltd for all future tenders. This is because the department of telecommunications failed to act on numerous representations by BSNL seeking permission for this action.

Sources said despite a series of letters from BSNL, the department kept the issue hanging for four months, possibly to leverage the Chinese company's potential to keep prices low.

As a result, BSNL was left with no choice but issue its mega-tender for 45.5 million GSM lines on Wednesday without incorporating any clause to ban Huawei, sources said. Huawei is also eligible to submit a re-bid for the new CDMA tender of 2.5 million lines issued by BSNL last week.

The request for the ban and blacklisting arose after it failed to supply 1.05 million CDMA lines despite bagging a contract for the same in partnership with Himachal Futuristic Communications Ltd (HFCL).

Huawei's failure to supply equipment "caused substantial damage, loss of revenue as well as goodwill to BSNL's development plans", the letters stated.

BSNL had also sought the ban "to prevent any similar occurrence in future from Huawei or any other vendor". In yet another communication, BSNL had pointed out that the ban was necessary "to safeguard the interest of BSNL in such a period of high competition with private operators".

While DoT officials refused to comment on their supposed inaction in this matter, industry analysts said the presence of Chinese equipment manufacturers would lead to a bidding war for the 45.5 million GSM-line tender, which could bring down the price per line by as much as 40 per cent less than international prices.

BSNL chairman and Managing Director AK Sinha said the GSM tender was worth over Rs 20,000 crore based on an estimation of Rs 3,400 per line. Analysts estimate that Chinese players can push this price to below the Rs 2,500 mark.