To probe the limited issue of disqualification of Nokia Siemens Networks from the 93-million GSM lines tender.
Under attack for alleged non-transparency in its mega 93-million Global System for Mobile Communications (GSM) lines tender, at an investment of Rs 32,000 crore, state-owned BSNL has referred the case to a two-member integration panel approved by the Central Vigilance Commissioner (CVC).
Two former Chief Election Commissioners, T S Krishnamurthy and B B Tandon, are on the integration panel of BSNL and the panel will look into complaints from vendors related to procurement of equipment. BSNL Chairman and Managing Director Kuldeep Goyal confirmed the development and said this had been done after equipment supplier Nokia-Siemens Network, which was disqualified on technical grounds, alleged that the state-run telecom operator’s recent 93-million GSM lines tender was conducted in a non-transparent manner.
BSNL had chosen the bids submitted by Ericsson and Huawei, while rejecting the offers made by three other vendors, Nokia Siemens, ZTE and Alcatel Lucent. However, BSNL has not placed the Advanced Purchase Orders (APOs) with the respective vendors so far.
The Andhra Pradesh High Court has directed BSNL not to proceed with the finalisation of the tender until further orders.
Huawei, a Chinese company, which was the sole financial bidder in the south, was slated to get the contract even though there were major objections raised by security agencies on giving orders to a Chinese company.
However, BSNL came up with a formula that Chinese vendors will not be allowed in states which have international borders with Pakistan, Bangladesh, Myanmar and China. While Ericsson was finalised as the equipment supplier for the northern and eastern regions. No decision has yet been taken for the Western region.
The two-member panel has already met once and the next meeting is likely to be in the last week of this month. Sources said the panel would be looking into limited issue of disqualification of Nokia Siemens Networks (NSN) from the tendering process.
Sources added that BSNL might face trouble over the costing of towers and power plants, which had been pegged at over 70 per cent of the total cost of the projects and is considered very high.
No confirmation could be ascertained whether BSNL had referred this issue, too, to some panel or not.
NSN had raised issues regarding the transparency of the tendering process, since the company was not given any clarifications for its disqualification.
The net result of this process would be that BSNL’s expansion may be delayed by several months and it may lose market share to private operators.
Drops plan to bid for Tunisia licence
The company has dropped plans to bid for telecom licence in Tunisia, as the returns will not be enough to enter that market through the bidding of licence.
“We did not bid for Tunisia... We did not find returns on our investment,” a senior BSNL official told PTI.
Earlier, CMD Kuldeep Goyal had said BSNL was planning to bid for a telecom licence in Tunisia and gain a footprint in the African market, which has immense potential. But not bidding for Tunisia does not mean BSNL has lost sight of the potential of the African region, which it says has growing mobile usage.
A BSNL official said the minimum bid price was understood to be $10 million. The Tunisian market was well-penetrated with 80 per cent of the population owning mobile phones, which did not leave much scope for further penetration
BSNL has shortlisted eight consultants, including Ernst & Young, McKinsey, KPMG and PricewaterhouseCoopers, for its plans of mergers and acquisitions, strategic partnerships and overseas forays.
The state-run firm, which so far concentrated only on the Indian market (except Delhi and Mumbai), has decided to expand overseas. Sources said BSNL had a cash surplus of over $10 billion and would use part of these resources for its overseas foray.
After being denied entry to Delhi and Mumbai, BSNL was finally granted permission by the government to venture outside the country through acquisitions, joint ventures and licence buys to expand.
BSNL has already set up a separate international business division to explore telecom opportunities abroad.
Last year, Bharti Airtel and Reliance Communications entered into negotiations with the South Africa-based telecom giant MTN to expand in the African continent, but the talks failed. Bharti again has revived talks with MTN for a cash- cum-stock acquisition.
Earlier this year, Tata Communications announced plans to expand its operations in Africa through acquisitions, joint ventures, and new projects, and in January increased its stake in South African fixed-line operator Neotel to 56 per cent.
BSNL’s sister concern, MTNL, has already forayed into Nepal and Mauritius. Analysts said BSNL may be exploring the possibilities of bidding for mobile licences in Egypt, Rwanda, Malawi, Turkey and Iran. All these countries will open bids for licence auction within a couple of months.
