HC stops BSNL from awarding GSM bids

In a setback to state-owned BSNL, the Delhi High Court today restrained the public sector undertaking from awarding any contract for its GSM network expansion till the next date of hearing on November 16.

A division bench comprising acting Chief Justice Vijender Jain and Justice Kailash Gambhir was hearing the petition, filed by US telecom major Motorola, which was disqualified by BSNL on technical parameters from participating in the bidding. Motorola has challenged BSNL's decision before in the high court. Early last month, BSNL had invited the financial bids for the expansion of its GSM network to add over 45 million lines in three years at an estimated cost of Rs 20,000 crore. In the bidding process, Swedish company Ericsson emerged the lowest bidder followed by Nokia of Finland.

S D Saxena, director (finance), BSNL, said: "We respect the direction of the Delhi High Court. Since the matter is subjudice, we cannot give any further comment in this." The telecom PSU is currently in the process of evaluation of the financial bids of both the players, which will be completed soon. If selected, Ericsson will be awarded 60 per cent of the contract, while Nokia will get the remaining 40 per cent. According to sources, Ericsson had quoted $107 per line while Nokia's bid stood at $177. The officials of both companies declined to comment on the financial figures quoted by them.

Motorola has shown its experience only for BSS component, which provides all the transmission and control functions necessary for radio coverage of service area, toward the supplies, installation and commissioning of 20 million network, the state-run telecom company said.

Whereas, it has not been able to establish the experience for the NSS component, which establishes calls between caller and called subscriber, for the 20 million network and has not submitted the user certificate for the offered core equipment of M/s Lucent Technologies, the partner of Motorola, the affidavit said.

BSNL submitted that instead of fulfilling the basic NSS component of eligibility condition of supplying/commissioning 20 million GSM network, Motorola provided a figure of 3.2 millions which does not meet the minimum requirement of 20 million.

The PSU telecom company said that Motorola also failed on financial parameters. As per bidding conditions, a company must be a profit earning company in the last two years but Motorola did not meet this criterion too as it suffered a loss almost Rs 37 crore in 2004-05.

Earlier, last month, BSNL, had opened financial bids for the mega expansion of its GSM network to add about 45 million lines over a period of three years at an estimated cost of about Rs 20,000 crore.

Swedish company Ericsson had emerged the lowest bidder followed by Nokia of Finland. When contacted S D Saxena,

Director (Finance), BSNL told PTI, "We respect the direction of the Delhi High Court. Since the matter is subjudice, we cannot give any further comment in this regard."