Elcoteq plans to woo local ally for BSNL tender

Elcoteq SE is in talks with major bidders for undertaking manufacturing of 30 per cent of the BSNL's 60 million GSM line tender. The $5 billion tender to be issued by March-end is the world's largest tender for GSM lines.

Under the indigenous manufacturing obligation, the bidders for the tender have to manufacture a minimum of 30 per cent equipment directly or through tie-ups with the manufacturers in India.

"We are practically knocking on every door," said Henry Gilchrist, director, business development and marketing, Elcoteq Asia Ltd. The company can begin with 20-30 per cent localisation and achieve 50 per cent in 12-18 months, he added.

The Department of Telecommunications has also asked the private operators to follow this method. The 30 per cent clause has been incorporated to kick-start domestic telecom manufacturing and help the PSUs meet their targets. In the past, suppliers had cited third-party delays as a reason for not meeting deadlines.

With out divulging any name Gilchrist said that one bidder had assured Elcoteq to outsource manufacturing, if it wins the tender.

Elcoteq is a Finnish company with a manufacturing unit in Bangalore which can produce upto 10 million handsets. At present, the company is involved in refurbishment and upgradation of handsets and manufacturing infrastructure equipment.

The EMS major is also working with one of the Korean telecom equipment makers on refurbishment.

The facility would start handset manufacturing in the second-half of 2006, with large scale manufacturing set to begin in 2007, said Gilchrist.

On the company's plans to invest $50-100 million in India, he said that the figure could go up as the company started with a reasonably conservative estimate.