BSNL’s Nokia tender disqualification upheld

On 26 Aug 2009, 0041 hrs IST, Joji Thomas Philip, ET Bureau at
http://economictimes.indiatimes.com/BSNLs-Nokia-tender-disqualification-upheld/articleshow/4934659.cms
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NEW DELHI: BSNL has overcome two major challenges in its attempt to award the world’s largest telecom contract, clearing the way for it to open price negotiations with the two companies it has shortlisted for the deal.

An ‘integrity panel’ set up with the permission of the country’s top anti-corruption body, the Central Vigilance Commission, has endorsed the state-run company’s decision to disqualify, on technical grounds, Nokia Siemens Networks from its Rs 35,000-crore tender to supply equipment for 93 million mobile phone  connections.

The Andhra Pradesh High Court, too, ruled on Monday that BSNL was justified in disqualifying NSN because it did not meet the technical requirements.

“We are glad both the integrity panel as well as the courts have cleared us of any wrong doing given the fact that there were allegations that we were not transparent with the selection process,” a top BSNL executive said. BSNL, the executive added, will immediately start price negotiations with China’s Huawei and Swedish company Ericsson. “The only possibility of this tender being further delayed is if NSN were to approach the Supreme Court.”

BSNL has been making huge operating losses in the past two years, only managing to stay in the black because of interest income from its accumulated cash reserves. It ran out of capacity to expand cellular services nearly 18 months ago and no new major contracts for mobile networks and equipment have been awarded in the past 24 months.

NSN said it has obtained the report of the integrity panel — whose members are former chief election commissioners TS Krishnamurthy and BB Tandon — and is “internally reviewing the contents.” A company official added that it has still not received the order of the AP High Court.

The panel was set up after NSN approached the anti-corruption body seeking a probe into its disqualification. It also filed petitions in the Delhi and Chandigarh High Courts as well as the AP High Court. While the Delhi High Court said the case did not fall under its jurisdiction, the Chandigarh High Court asked BSNL to get NSN’s bid evaluated by an independent panel. The AP High Court had in May asked BSNL to put on hold the tendering process until it took a decision.

In May, a year after the tender was floated, Ericsson was short-listed as the lowest bidder for the northern and eastern regions, while Huawei made the cut for the western, eastern and southern zones. NSN has argued before the courts that it was not given proper reasons for its disqualification and claimed all details that BSNL wanted were provided.

On the other hand, BSNL has maintained that all the four companies which were disqualified — NSN, China’s ZTE, Alcatel-Lucent and Nortel — were purely because of technical reasons.

BSNL executives have told ET that they suspect ‘vested interests’ are behind the legal challenges to delay its tender and stymie the state-run company’s expansion. They cited a similar petition in Delhi High Court in 2006 by Motorola, which delayed BSNL’s expansion plans by about a year. Motorola later withdrew the case. BSNL’s last tender in 2006 for about 43 million lines, then the largest, was finally reduced to 13 million lines after telecoms minister A Raja’s intervention.

The umbrella body representing all employee unions of BSNL has asked the telco’s management to act against NSN for delaying BSNL’s expansion plans.

NSN denies any such motive and says it has “long-standing relationship with BSNL” and “look(s) forward to supporting them in the future as well”.

Ericsson unveils Tower Tube in India – CIOL News Reports

Ericsson unveils Tower Tube in India – CIOL News Reports

From http://www.ciol.com on June 16, 2009

Shared via AddThis

HYDERABAD, INDIA: Ericsson unveiled its latest radio base station site concept -  Ericsson Tower Tube – for the Indian telecom market.

The award winning solution reduces total cost of ownership for customers and provide a sustainable, energy efficient and cost-effective means of bringing communication.

In contrast to traditional towers, the Tower Tube’s design employs modular concrete construction that allows the structure to be deployed quickly and easily, besides providing additional protection from vandalism and lightening. A self-contained site, it safely houses all equipment within its slim design (about 5m diameter at the base), making site acquisitions easier as compared to conventional sites which require more area for set-up.

In addition, the Ericsson Tower Tube does not require feeders and cooling systems. This results in up to 40 percent lower power consumption than traditional base station sites.

P Balaji, vice president, marketing and strategy, Ericsson India and Sri Lanka, said,” At Ericsson, it has always been our effort offer world-class products and services to our customers. This energy-optimized radio base station concept reflects our ability to understand and respond to customer requirements by reducing the total cost of ownership in order to expedite the roll out of mobile communications in India”.

Designed by Scandinavian architect Thomas Sandell, the Ericsson Tower Tube recently won the Technology Design category of the 2008 Wall Street Journal Technology Innovation Awards.

BSNL’s GSM project faces further delay

Thomas K Thomas on The Hindu Business Line on June 15, 2009

New Delhi, June 15 Finnish telecom equipment-maker Nokia Siemens Networks (NSN) has shot off a fresh letter to Bharat Sanchar Nigam Ltd’s two-member integrity panel alleging that it has been unfairly singled out of the bidding process for the Rs 30,000- crore GSM project.

NSN has alleged some of the other bidders had also not produced certificates required to be eligible for the tender.

The panel is investigating whether the tendering process was transparent or not. BSNL will not award the contracts till the investigations are complete.

Experience certificate

The Punjab and Haryana High Court had directed BSNL to give the reasons in writing. According to BSNL sources, NSN had not submitted an experience certificate for the North zone. However, NSN countered it on the ground that the certificate submitted for other zones was relevant for the North zone as well. NSN said in its letter that if BSNL had to disqualify its bid, then the PSU should have also rejected Ericsson’s bid since the latter had allegedly not given a separate certificate for 2G equipment, though BSNL had floated different tenders for 2G and 3G equipment.

BSNL had referred the dispute to an integrity panel approved by the Central Vigilance Commissioner after NSN took its case to the CVC seeking intervention. Two former Chief Election Commissioners — Mr T.S. Krishnamurthy and Mr B.B. Tandon — are the members on this panel. Ericsson and Huawei were short-listed by BSNL, which had rejected offers from NSN, Alcatel Lucent and ZTE.

Bring home the world on a single line

Thomas K. Thomas on The Hindu Business Line on June 12, 2009

New Delhi, June 11 Mrs Vinita Gupta, a housewife living in a residential complex in Greater Noida, does not know that she is among the first in the country to experience the latest in broadband technology — Gigabit-capable Passive Optical Network (GPON).

What it offers

Thanks to this technology, she, along with others who recently moved to this 3,000-unit complex, has access to services such as movie-on-demand, high definition television, surveillance systems, fire alarm system, or can even switch off lights and fans at home while sitting elsewhere.

GPON is an optical fibre cable access technology for delivering high-capacity broadband services that allows carriers to deploy a whole range of telecom and entertainment services on a single line.

While Mrs Gupta has taken only the IPTV and high-speed Internet services, she can even keep a watch on her house via her mobile when she is away on a holiday through the elaborate surveillance system being set up in the housing complex.

The solution is being offered by Swedish major Ericsson, which has partnered with Delhi-based property management services provider Radius Infratel Pvt Ltd to take this technology to other parts of the country.

The two are now set to bag a major contract for wiring up the Commonwealth Games Village and another for rolling out GPON throughout Dwarka in South-West Delhi.

This technology offers 100 times more capacity and is at least six times faster than the existing wire line broadband systems.

Operators, including BSNL and Bharti Airtel, are toying with the technology and the Ericsson-backed projects could just signal the beginning of high speed broadband finally coming to India.

Interview: Reaching out for last mile with FTTH

From www.ciol.com on June 11, 2009

BANGALORE, INDIA: At your wits’ end owing to slow broadband speed? Time to move on to to fiber.

 Of late, fiber network has emerged as a strong alternative to the existing broadband accessing technology, DSL (Digital Subscriber Line) in India.

The India optical fiber market showed a CAGR of 43 per cent (from 2003-2008), making it the fastest growing market in the world. In no time, India saw an upcoming of VoIP and IPTV usage, which in turn calls for more bandwidth (copper wire has limited bandwidth compared to fiber). 

Low operational and maintenance cost, higher bandwidth and decreasing prices are further augmenting fiber network’s growth, and today, it is all set to enter your homes to cater to speedier broadband requirements.

Telecoms vendor Ericsson recently deployed India’s first-ever residential FTTH-GPON (Fiber-To-The-Home- Gigabit Passive Optical Network) project with Radius Synergies.

P Balaji, vice president, marketing & strategy, Ericsson, says: “Ericsson had its eyes on India’s growing broadband base, ever since it strengthened its IP portfolio with the acquisition of  Entrisphere, way back in 2007. The adoption of fixed broadband access is seeing resurgence at the residential and enterprise levels and FTTH technology will play a critical role in driving this forward.” He was speaking to CIOL with regard to Ericsson’s FTTH launch.

CIOL: The end-to-end fiber access solution from Ericsson is based on EDA 1500 GPON system, which offers the highest capacity available in the market and its Micronet and Ribbonet air-blown fiber, and microcable solutions. Can you elaborate on this?

P Balaji: Ericsson EDA (Ethernet Data Access) 1500 provides the highest capacity GPON solution in the world. Based on a carrier-class platform, EDA 1500 is key for the converged high-capacity, all-IP fiber networks needed for advanced services such as IPTV. It comprises Optical Line Terminal (OLT), Optical Network Terminals (ONTs) and EntriView.

“Ribbonet and Micronet” are ducting and fiber solutions for building the last mile access.

Ericsson’s Ribbonet Air Blown Fiber (ABF) system has been developed specifically to provide fast, efficient and flexible fiber distribution in the drop and premises network for medium to long-distances.

Ericsson Micronet Air Blown Micro Cable system is useful when deploying metropolitan and access networks.

CIOL: Will FTTH solve bandwidth problem in India?

PB: FTTH is the way forward for wireline networks of the future as the need for large bandwidth applications grows. Fiber technology can accommodate such bandwidth requirements for applications and high-speed data transmissions with ease.

Fiber also has duplex transmission ability which means signals can be transmitted both ways-from exchange to customer and vice versa, which plays a vital role in applications such as interactive IPTV.

CIOL: Where do you see the demand coming from, with Indian metros already furnished with copper networks and real estate business is a bit dull?

PB: According to industry experts, the market for FTTH services in India is expected to be much higher than other markets such as the US, because of the huge size of the Indian population.

Penetration of fiber infrastructure has been rising in the Indian cities since the last five years and most of the commercial buildings today have fiber connectivity or fiber ring passes, parallel to existing copper.

For buildings which have pre-existing cable infrastructure inside, Ericsson has two solutions namely FTTC/B (Fiber to the Curb/Building) and FTTH (Fiber to the Home).

Today, condo homes are increasingly becoming popular in India and connected homes is a big trend. Therefore, the need for bandwidth hungry applications is going to be high. Further, the unique business model being followed by companies such as Radius, who built the open access infrastructure in a partnership arrangement, should help create value for developers, facility management companies and service providers.

CIOL: What is the scope of FTTH–GPON technology in India?

PB: Current market estimates indicate that India could be having as many as one million FTTH lines within the next three years. The main driving forces for FTTH in India are high speed, bandwidth applications such as VoIP, IPTV, HDTV, Smart Home etc.

With a marked improvement in performance over DSL, adoption is expected to gain ground leading to reduced cost of services. This will drive users to easily avail FTTH services at home even though they might use other services like normal TV.

We are in discussions with the key market players for FTTH–GPON deployment. The fact that operators are keen to roll out close to a million lines in the next 2-3 years represents the sense of optimism and potential about this domain.

To catalyze the growth of FTTH, we are working with carriers and also promoting initiatives of infrastructure companies such as Radius, who plan to build GPON-based FTTH network and provide open access to all the carriers, on a Pan-India basis.

Being an ITU-T backed technology, GPON has a high degree of acceptance within the carrier community. Although it is true that its benefits are just starting to be realized in India, what is important to note is that leading operators such as BSNL are convinced of its potential and have already begun its adoption. Others too are looking at following suit shortly.

We foresee the growth of FTTH GPON as a network and of “Open access infrastructure based upon GPON–FTTH” as fixed broadband in India. Initiatives like RADIUS NANO – Neutral Access Network Operations – will take the lead on FTTH rollouts.

CIOL: Going forward, what will be the challenges in laying optic fiber in India?

PB: The biggest challenge in FTTH deployment is the passive (fiber access) planning and roll out. As reaching the last mile can be difficult, it is essential to focus on the logical planning of the Access network.

Besides, like any new technology, the market uptake will initially be slow. Therefore, ‘rightsizing’ capacity build out is extremely important. In this regard, Ericsson has a unique proposition because of its own special Air Blown Fiber solution, which makes deployments easy and cost effective, reducing OPEX spends by lowering AMC costs.

System integration is another challenge because of the numerous active, passive infrastructure elements.

CIOL: Won’t high cost of service, compared to DSL networks, be a hindrance to FTTH’s penetration?

PB: There are certain applications which require higher bandwidth for which demand is increasing. In today’s environment, enterprises are looking at continuous 24×7 connectivity as well as quality of service (QoS).

This trend is expected to be also echoed by the residential sector. Hence, while enterprises will show high acceptance and facilitate service uptake in the short to medium term, in the longer term, with IPTV gaining popularity, contribution from the residential sector is likely to increase substantially leading to lower cost of service, higher market penetration which will drive affordability of the fiber based infrastructure over DSL.

Increasingly, operators are also seeing a business case in terms of user acceptability and TCO (Total Cost of Ownership), as they begin to roll out FTTH–GPON based networks. Moreover, going forward, prices will fall which will lead to reduction in tariffs.

BSNL staff unions ask telco to act against Nokia Siemens

9 Jun 2009, 0208 hrs IST, Joji Thomas Philip, ET Bureau

NEW DELHI: The umbrella body representing all employee unions of BSNL, the country’s largest telco by revenues, on Monday asked the telco’s management to act against global networks major Nokia Siemens Networks (NSN) for ‘delaying BSNL’s expansion plans’.

This comes as Nokia Siemens had gone to courts challenging BSNL’s decision to disqualify the company’s bid for 93 million GSM lines on technical grounds. NSN had first approached the Delhi High Court seeking a stay on BSNL network contracts worth $6 billion that were awarded to Sweden’s Ericsson and China’s Huawei, but its petition was dismissed on grounds of jurisdiction. Following this, NSN had approached the regional high courts in Chandigarh and Hyderabad.

Responding to NSN’s petition, the Andhra Pradesh High Court ordered status quo on the tendering process in the south zone – the court also asked BSNL not to proceed with finalisation of the tender for the south zone until further orders.

“We have told BSNL management that the company should take action against such vendors that hold up BSNL’s expansion plans. These vendors never go to court when private operators reject their equipment. BSNL already faces a severe capacity crunch and any further delay in awarding the contracts will lead to the company not being able to compete with private operators,” the secretary general of the BSNL employee unions, VAN Namboodiri told ET.

The employee unions, in a communication to the BSNL management, also pointed out that while the government and security agencies had raised objections to BSNL awarding contracts to Chinese equipment major Huawei, similar concerns were not raised when private telcos purchased equipment from the Chinese vendors.

“We have no doubt that this (NSN going to courts and government raising objections to Huawei) is a conspiracy between the private telcos and private suppliers, as also certain forces within the government to weaken and reduce BSNL and privatise it gradually so that there will no public sector to compete with the private sector, which will enable them to increase the charges without any restraint and control,” the employee unions added in their communication to the government.

Highlighting a conspiracy angle, Mr VAN Namboodiri added that Motorola had filed a similar petition in the Delhi High Court in 2006, which delayed BSNL’s expansion plans by about a year, ‘during which period BSNL lost its first position in total connections and came down to fourth position in mobile services’. Motorola later withdrew the case.

Nokia Siemens on its part maintains that BSNL had disqualified the telco without providing any reasons. NSN in its earlier communication to the Central Vigilance Commission (CVC) pointed out that it had furnished all clarifications, details and explanations, along with additional customer reference certificates as desired by BSNL and was therefore confident of meeting all the technical requirements.

“We are fully confident that we meet the requirements as desired by BSNL. Even if the BSNL evaluation team feels that there are any shortcomings in our furnished responses, we should be given an additional chance for submission/explanation,” NSN had told the CVC. NSN has also added that since only a single bidder has been short listed for each of the four zones, BSNL would ‘be deprived the benefits of competitive bidding’.

Similarly, in the Delhi High Court, NSN had alleged that BSNL shortlisted Huawei despite security concerns regarding it being a Chinese company. But BSNL executives maintained that they had opened the bids only after getting security clearance to award telecom equipment contract to Huawei. Last month, security agencies had allowed BSNL to give contracts to Huawei only in the southern states as this region does not share sensitive borders with Pakistan, China and Bangladesh.

BSNL looks for global OEMs to bid for WiMax operations

6 Jun 2009, 0056 hrs IST, Joji Thomas Philip, ET Bureau

NEW DELHI: State-owned BSNL on Friday issued fresh tenders to run its WiMax operations, even as it tightened the eligibility criteria and introduced a slew of additional safe-guards in the wake of the telco being forced to abort its previous tender in light of dubious operators making it to the final shortlist.

“We have issued fresh tenders for companies to run our WiMax services across 16 circles on a revenue share franchisee basis. This time around, only original equipment manufacturers (OEMs) and system integrators can bid. We are confident that shell or paper companies will not be eligible to bid,” BSNL’s chairman and managing director Kuldeep Goyal told ET.

According to Mr Goyal, the telco was looking at global OEMs, such as Ericsson and Cisco, to bid for its WiMax tenders. The logic: OEMs have the technical capabilities to launch and operate such networks especially since they manufacture the same. “We are also looking at system integrators, such as IT companies, to run the operations. All bidders must have a minimum turnover of Rs 100 crore each for the last two years,” Mr Goyal added. In fact, the tender documents will be issued only after proof of turnover is shown.

ET had first reported on June 3 that BSNL would seek fresh bids for franchisees across the country to roll out technology that allows users the wireless access to high-speed internet and other data applications over a large area. BSNL expects WiMax to generate multi-billion dollar revenues over the next 10 years.

The telco had cancelled the earlier tender after its own investigations revealed that five of the six shortlisted companies — WiExpert Communications, SV Telecom Systems, Digitelco Communications, Spectrus Communications and Technotial Infoways — were acting as ‘fronts’ for certain individuals. It was found that these companies shared the same corporate details, notaries, auditors and dates of incorporation, and even their last annual general body meeting was shown to be held on the same day. BSNL had also come under pressure from its labour unions to scrap the tender following reports of wide-scale corruption in the methodologies adopted to shortlist successful bidders.

Companies, which want to participate in the new tender, have been given a deadline till August 4, 2009, to submit their bids. A host of companies, which were mysteriously disqualified from the earlier tender, are expected to place fresh bids — these include Soma Networks, Cisco-backed Terracom, Unwire India and Welcomm Communications, which has a tie-up Huawei and Aricent.

BSNL already has a tie-up with US-headquartered Soma Networks, which runs WiMax services for the PSU in the circles of Gujarat, Maharashtra (including Goa) and Andhra Pradesh. The deal with Soma has also raised concerns considering that BSNL had appointed this franchisee without going through a bidding process.

Besides, the WiMax forum has also pointed out that Soma Networks was deploying mobile WiMax in FDD format, a technology standard that is not recognised by the forum globally.

HC asks BSNL to maintain status quo on GSM tender till June 10

From The Hindu Business Line, Thursday, Jun 04, 2009

New Delhi, June 3 The Andhra Pradesh High Court on Wednesday asked Bharat Sanchar Nigam Ltd to maintain status quo in the tendering process for awarding to Huawei a contract for rolling out GSM network in the South zone till June 10.

The court has asked the Department of Telecom to file a response to a petition filed by Nokia Siemens challenging the tendering process. The Chinese vendor Huawei will be a party to the case.

Nokia Siemens had challenged BSNL’s decision to disqualify its bids on technical grounds. The Finnish company said that it had supplied equipment to BSNL on previous occasions and, therefore, it was unfair to find technical problems with its bid. It alleged that BSNL had designed the tender to favour some vendors. According to Nokia Siemens, the technical deficiencies in its bid have not been explained.

In a letter written earlier to the Department of Telecom, NSN said that it had clarified all questions which BSNL had raised during the valuation of the technical bids

Similar plea

A similar petition was filed by Nokia Siemens in the Punjab and Haryana High Court which asked BSNL to submit its reasons for disqualifying the company. The Finnish company is examining BSNL’s reply given to the Punjab and Haryana High Court before taking the next step.

The Andhra Pradesh High Court’s order will delay BSNL’s plans to roll out 93-million lines across the country.

The project was divided into four zones. While Ericsson has been shortlisted for North and East zones, Huawei was chosen for South. Bids for the West zone were not opened by BSNL after the Intelligence Bureau (IB) raised questions about giving contracts to Chinese vendors in sensitive regions.

Though the IB had raised objections to giving contracts in the South to Chinese vendors, BSNL went ahead with Huawei.

Indian telecom industry grew 24% to top $24 bn: Survey

1 Jun 2009, 1534 hrs IST, IANS on http://www.economictimes.com

NEW DELHI: Despite the overall slowdown and driven by unprecedented demand for mobile phone

connections, the Indian telecom equipment industry grew 20% last fiscal to top $24 billion in revenues, says a new survey.

Interestingly, though, the market for mobile and fixed-line handsets grew just 6 percent because of crashing prices and focus on rural market, said the annual survey by Voice and Data, a telecom industry journal of CyberMedia group.

“We’ve seen this before,” said Prasanto K. Roy, chief editor of Voice&Data. “In a downturn, telecom gains, as businesses deploy cost-saving tech,” Roy told IANS.

“In the last downturn, internet telephony got a boost. This time, it’s video-conferencing, including high-spend areas such as tele-presence.”

According to the survey, Finnish mobile and equipment maker Nokia retained the number one ranking among telecom equipment players. Sweden’s Ericsson, Nokia-Siemens Networks, Alcatel-Lucent and Chinese vendor Huawei made up the other four in the list.

“Despite all the noise about the national security angle of Chinese vendors who are doing extremely well in most other global markets, they have been able to establish themselves as big and acceptable players in India,” said the magazine.

The survey also revealed that the fixed phone market has actually fallen by a third, losing out to the mobile market segment in recent years, which expanded by 7.9 percent in 2008-09.

“Availability of affordable feature-rich mid-range handsets in the market is the secret behind the explosive number growth in the mobile industry,” the survey said.

“With more mobile operators launching services, and established players turning their attention to low tele-density markets, mobile telephony is only likely to continue its growth run.”

The survey says even though the overall telecom sector’s story had been good during the last fiscal, the last few months had its share of challenges too, for which the industry blamed on the government and pressure from vested interest groups.

But the industry hopes that Prime Minister Manmohan Singh will intervene himself, as part of his stated plan to review the performance in key ministries, and ensure that all bottlenecks are removed and the telecom industry continues to log high grow.

Unitech Wireless awards $500m network contract to Ericsson

29 May 2009, 0715 hrs IST, Sanjeev Choudhary, ET Bureau

NEW DELHI: Unitech Wireless, a joint venture between Norwegian telco Telenor and Gurgaon-based realty firm Unitech, has awarded a $500 million (Rs 2,500 crore) to supply and manage all network equipment for its rollout of mobile phone services in three telecom circles.

Ericsson will be responsible for managing the network for five years in service areas of Bihar, Eastern and Western Uttar Pradesh, said a Unitech Wireless executive, who asked not to be named. Ericsson and Nokia Siemens Networks were the front-runners for the contract.

Unitech Wireless, which is 67% owned by Telenor, has licences to operate in all 22 telecom circles across the country. The company will miss the July deadline for the launch of its telecom services, as it still doesn’t have the infrastructure in place.

“We have tied up for towers and equipment. But our marketing and distribution set up is still not in place,” said Unitech Wireless chairman Sanjay Chandra. The services will be launched by the year-end , he said.

Ericsson operates in 175 countries and reported a revenue of $27 billion in 2008. It builds and manages the networks of Bharti Airtel in large parts of the country.

Earlier, Unitech had awarded a fiveyear equipment supply and management contracts to French telco Alcatel-Lucent for about $150 million for Kerala and Orissa. Unitech’s $225 million contract for Karnataka, Andhra Pradesh and Tamil Nadu circles had gone to Chinese telecom equipment manufacturer Huwaei.

Unitech Wireless recently awarded a nine-year IT outsourcing contract to Bangalore-based Wipro for around Rs 2,500 crore. It has also signed an agreement with Tata Teleservices for the sharing of towers.

AP High Court asks BSNL to file response to Nokia Siemens

From The Hindu Business Line on 29 May 2009

Our Bureau

New Delhi, May 28 The Andhra Pradesh High Court has asked Bharat Sanchar Nigam Ltd to maintain status quo in the tendering process for awarding to Huawei a contract for rolling out GSM network in the South zone.

The status quo will be maintained till the next date of hearing, June 3. The court has asked BSNL to file a response to a petition filed by Nokia Siemens challenging the tendering process. The Chinese vendor Huawei will be a party to the case.

Nokia Siemens had challenged BSNL’s decision to disqualify its bids on technical grounds. The Finnish company said that it had supplied equipment to BSNL on previous occasions and, therefore, it was unfair to find technical problems with its bid. It alleged that BSNL had designed the tender to favour some vendors. According to Nokia Siemens, the technical deficiencies in its bid have not been explained. In a letter written earlier to the Department of Telecom, NSN said that it had clarified all questions which BSNL had raised during the valuation of the technical bids.

A similar petition was filed by Nokia Siemens in the Punjab and Haryana High Court which asked BSNL to submit its reasons for disqualifying the company. The Finnish company is examining BSNL’s reply given to the Punjab and Haryana High Court before taking the next step.

The Andhra Pradesh High Court’s order will delay BSNL’s plans to roll out 93 million lines across the country. The project was divided into four zones. While Ericsson has been shortlisted for North and East zones, Huawei was chosen for South. Bids for the West zone were not opened by BSNL after the Intelligence Bureau raised questions about giving contracts to Chinese vendors in sensitive regions. Though the IB had raised objections to giving contracts in the South region to Chinese vendors, BSNL went ahead with Huawei.

Court tells BSNL to give reasons for disqualifying Nokia Siemens offer

Thomas K Thomas on The Hindu Business Line on 27 May 2009

New Delhi, May 26 The High Court of Punjab and Haryana has directed Bharat Sanchar Nigam Ltd to give reasons for disqualifying the offer from Nokia Siemens Networks for the PSU’s 93-million GSM line. The court has set a deadline of Wednesday afternoon for BSNL to file its response.

Finnish telecom equipment company Nokia Siemens had challenged BSNL’s decision to disqualify its bids on technical grounds. NSN’s primary grouse was that it had supplied equipment to BSNL on previous occasions and, therefore, it was unfair to find technical problems with its bid. NSN alleged that BSNL had designed the tender to favour some vendors. According to NSN, the PSU had not explained what technical deficiencies have been found in its bid. In a letter to the Department of Telecom, NSN said that it had clarified all questions BSNL had raised during the valuation of the technical bids.

The High Court told NSN that it can approach the Bench again if it was not satisfied with the reasons given by BSNL. During the proceedings today, counsel for BSNL asked for more time to submit the reasons but the court declined.

On May 15, BSNL opened the financial bids submitted by Ericsson and Huawei for its 93-million line GSM contract estimated to be worth Rs 30,000 crore. Ericsson had been short-listed for North and East zones. Though Huawei had qualified for West, East and South zones, BSNL opened the bid only for the South zone after security agencies raised concerns about giving contracts to Chinese manufacturers.

Other bidders, including ZTE, Nokia Siemens and Alcatel Lucent, were disqualified on technical grounds and so their financial bids were not opened. Disqualified from bidding for the project, Nokia Siemens had sought the intervention of the Competition Commission of India and the Central Vigilance Commission on the grounds that the tendering process was not transparent. It had raised questions on the disqualification, given that the Finnish company supplies equipment to operators worldwide, including Vodafone and Bharti Airtel in India. The company told the CCI that if its equipment was good enough for BSNL’s previous contracts then how could it be disqualified on technical grounds for the new project.

Nokia Siemens also highlighted the lack of competition in the bidding process since BSNL’s technical committee qualified bids from only one equipment supplier in three of the four zones. BSNL may have lost out in getting the best price in the process.

BSNL case: Nokia Siemens to move local HCs

23 May 2009, 0200 hrs IST, ET Bureau

NEW DELHI: Global networks major Nokia Siemens Networks (NSN) will now approach the Chandigarh High Court (HC) and may also appeal at the high courts of Mumbai and Hyderabd next week seeking a stay on BSNL’s network contracts worth $6 billion, which were awarded to Sweden’s Ericsson and China’s Huawei. This follows Delhi HC dismissing its petition on jurisdiction grounds.

On Thursday, NSN had filed a petition in the Delhi HC challenging BSNL’s decision to disqualify the company’s bid on technical grounds. During the proceedings on Friday, senior counsel Vikas Singh, appearing for state-owned BSNL, pointed out that the tenders challenged by NSN were floated in Chandigarh, Mumbai, Hyderabad and Kolkata zones of BSNL and were outside the jurisdiction of the Delhi High Court. Following this, the division bench of the Delhi HC dismissed NSN’s petition, while adding that the company could approach the appropriate high courts, which had the jurisdiction on the issue.

BSNL also rejected Nokia Siemens’ allegations that it (BSNL) had failed to maintain transparency in the tender process: “The whole process is just to delay BSNL’s expansion process. NSN was aware that there was a shortfall in their technology. They were told by BSNL that there was a shortfall in their technology,” Mr Singh said.

The BSNL counsel also said that NSN itself admitted that they were technically not qualified for the tender. With regard to NSN’s allegations that BSNL had not informed the company of its disqualification, Mr Singh said that rules laid down by SC stated the shorlisted bidders need to be informed only in big contracts.

BSNL executives suspect that NSN is attempting to delay the telco’s expansion plans. The PSU is already facing capacity crunch across the country and any further delay in awarding the contracts will result in the company falling a long way behind private operators, as it would be unable to expand its services. BSNL executives point out that Motorola had filed a similar petition in the Delhi HC in 2006, which delayed its expansion plans by about a year. Later, Motorola withdrew the case.

Meanwhile, senior advocate Abhishek Manu Singhvi, who appeared for NSN, alleged that BSNL had shortlisted Huawei, despite security concerns. “Huawei is a Chinese firm and there are security concerns. Moreover, government circulars mention that you could not have an enemy power in telecom and aviation sectors,” he said.

But, BSNL executives maintain that they had opened the bids only after getting security clearance to award the contract to Huawei. Last week, security agencies had allowed BSNL to give contracts to Huawei only in the southern states, as this region does not share sensitive borders with countries, such as Pakistan, China and Bangladesh. BSNL executives also add that while Huawei was shortlisted in east and west zones, its bids for these regions were not considered due to security issues.

As reported earlier by ET, BSNL is also of the view that NSN’s allegations are baseless, especially considering that the company had refused to supply 9.63 million GSM lines in BSNL’s earlier tender, despite being given the contract. BSNL maintains that NSN’s failure to accept the orders for these 9.63 million lines had impacted its network expansion plans.

Alcatel-Lucent may be a backup against Huawei

22 May 2009, 0117 hrs IST, Joji Thomas Philip, ET Bureau

NEW DELHI: In the event of the government warning BSNL against trojan horses, blackboxes, trapdoors and malwares in equipment supplied by China’s Huawei, BSNL plans to approach the French Indian combine of Alcatel-Lucent-ITI to be the backup for the 25-million lines contract in the southern states.

As first reported by ET, BSNL had got the approval of security agencies to award telecom equipment contract to Huawei, but only in the south as the region does not share any sensitive borders. Following this, BSNL decided to award Sweden’s Ericsson contract for 25-million lines for the North Zone and 18-million lines for the East Zone, while giving Huawei 25-million lines for the South Zone.

While BSNL is going ahead with price talks with Huawei in the South Zone, the telco may also ask Alcatel-Lucent-ITI to be a standby option in the event of any complications. Meanwhile, Nokia Siemens Networks approached Delhi HC seeking a stay on BSNL awarding Rs 30,000-crore network contracts to Ericsson and Huawei.

While BSNL is going ahead with price negotiations with Huawei in the South Zone, the telco may also ask Alcatel-Lucent-ITI to be a standby option in the event of any further complications that can delay its tender.

In this eventuality, Alcatel-Lucent will have to match the prices offered by Huawei and manufacture a significant part of these 25-million lines with loss-making PSU — Indian Telecom Industries (ITI).

While Huawei was the sole company shortlisted for the West Zone, BSNL has decided against awarding the 25-million lines contract for this region to the Chinese company and has already identified Alcatel-Lucent- ITI as the alternate solution.

Meanwhile, Nokia Siemens Networks on Thursday approached the Delhi HC seeking a stay on BSNL awarding network contracts worth $6 billion (Rs 30,000 crore) to Ericsson and Huawei. NSN has challenged BSNL’s decision to disqualify the company’s bid on technical grounds. If the Delhi HC issues a stay, it will have a major impact on BSNL’s expansion plans as the telco has exhausted capacity in all circles. In 2007, Motorola had filed a similar petition in the Delhi HC over its disqualification which threw BSNL’s expansion plans down the drain and allowed private telcos to pull ahead of the PSU.

Delhi High Court dismisses Nokia Siemens Network’s petition

22 May 2009, 1304 hrs IST, PTI, on www.economictimes.com

NEW DELHI: The Delhi High Court on Friday dismissed a petition filed by mobile equipment vendor Nokia Siemens Network (NSN) seeking a stay in the tendering process of the state-run telecom firm BSNL. BSNL made a submission that the matter pertains to tender floated in Chandigarh, Mumbai, Hyderabad and Kolkata zones of the PSU.

The division bench gave the liberty to NSN to approach the appropriate high court where the jurisdiction is lying.

NSN was disqualified from the tendering process of BSNL on technical grounds and had already approached Central Vigilance Commission alleging non-transparency and tweaking of norms by BSNL while disqualifying it. BSNL has floated a 93-million GSM line contract valued at Rs 30,000 crore for which the likely winners are Ericsson and Huawei Technologies. The formal announcement for successful bidders is yet to be made.

NSN seeks CVC probe on disqualification from BSNL deal

21 May 2009, 0258 hrs IST, Joji Thomas Philip, ET Bureau

NEW DELHI: Nokia Siemens Networks (NSN), which has been disqualified from BSNL’s tender for 93-million lines on ‘technical grounds’, has approached the Central Vigilance Commission seeking a probe into its disqualification. NSN had earlier approached the Competition Commission of India for the same.

The BSNL tender for 93-million lines is divided into four zones. Last week, BSNL had opened tenders for three zones — North, East and South Zones. Ericsson was awarded the contract for 25 million for the North Zone and 18 million for the East Zone, while Huawei bagged 25-million lines for the South Zone. Indian security agencies have permitted BSNL to offer contracts to Chinese companies like Huawei only in the southern states.

NSN had bid for all the four zones, but was disqualified. In its communication to CVC, Nokia Siemens has sought that BSNL provide the reasons for its disqualification. NSN has pointed out that they had furnished all clarifications, details, explanations, along with additional customer reference certificates, as desired by BSNL, and were therefore confident of meeting all technical requirements.

“We are fully confident of meeting the requirements, as desired by BSNL. Even if the BSNL evaluation team feels that there are any shortcomings in our furnished responses, we should be given an additional chance for submission/explanation,” added the communication. NSN has also added that since only a single bidder has been shortlisted for each of the four zones, BSNL would ‘be deprived of the benefits of competitive bidding’.

But BSNL sources say that all the four disqualified companies — NSN, China’s ZTE, Alcatel-Lucent and Nortel — were done so on technical grounds. BSNL suspects that vested interests were trying to delay its tender. The PSU is already facing capacity crunch across the country and any further delay in awarding the contracts will result in the company falling a long way behind private operators, as it would not be unable to expand its services and take on new customers.

NSN has also told CVC that BSNL’s tender for 93-million lines did not have a ‘local manufacturing clause’ in line with its earlier tenders.

The company has pointed out that it had put in investments into setting up a manufacturing facility in Chennai, software development centre in Bangalore and a network operating centre in India, expecting a long-term relationship with BSNL.

Besides, BSNL executives point out that NSN’s allegations were baseless, especially considering that the company had refused to supply 9.63 million GSM lines in BSNL’s earlier tender, despite being given the contract. BSNL also shares the view that NSN’s failure to accept the orders for these 9.63 million lines had majorly impacted its network expansion plans. Additionally, BSNL executives also say that network vendors cannot dictate terms of the tender. They add that NSN cannot rake up the issues, such as the tender not having a domestic manufacturing 15 months after the tender was issued.

India to be Ericsson’s hub for managed services

At www.thehindubusinessline.com on Monday, May 18, 2009 by Thomas K Thomas

New Delhi, May 17 With Ericsson set to bag major contracts worth multi-billion dollars from Indian operators including BSNL, the Swedish telecom equipment manufacturer is increasing its investments in India apart from making it the global hub for managed services and outsourcing.
Speaking to Business Line, Mr Carl-Henric Svanberg, President and CEO of Ericsson, said, “We are investing here. This is a very good place to be for us. This has been the home country, if you like, for managed services and outsourcing. It is where this concept started and here we receive a lot of tasks that can be done cross border.”

Site optimisation
“The logical thing for us is to do part of services work that can be done cross border. There are networks, for example, where the whole site optimisation work can be done here, without anybody even going to the country to optimise for. R&D is another area. We have 280 people now – in Chennai and Gurgaon which will probably double in another few years,” he added.

When asked whether Ericsson was looking at making India the hub for some of its global activities, Mr Svanberg said, “We are moving in that direction and we have more and more activities to outsource. But, if you see all the big companies whether it is IBM, or Huawei, it is here. India has become a country where there is a lot of outsourcing skills being developed. For Ericsson, the network operations centre that we have in India roughly handles about 11 customers. But it doesn’t work that way that whole network is run from a place. It may be optimisation work or it may be networking operations that could be outsourced here, but it’s seldom the whole thing.”

Broadband access

On the choice between WiMax and third generation technologies for broadband access, Mr Svanberg said globally a number of players are giving up on WiMax. He, however, said that it should be left to the market forces to dictate the choice of technology. “When we took a decision not to do WiMax, it’s just that since the HSPA technology will be the dominant technology — and it would have been a little bit odd for us to not be spending a lot of money developing one technology that makes up a bigger part of the world versus spend the same amount of money to just develop a similar technology once again that has no difference for any user. So, for us, it was just a business rational not to be involved in WiMax. It will be best if we leave it to the market forces to dictate the choice of technology for India.”

BSNL gets nod to award deal to Huawei

16 May 2009, 0217 hrs IST, Joji Thomas Philip, ET Bureau

NEW DELHI: State-run telecom giant BSNL has overcome opposition from the Intelligence Bureau (IB) and the defence ministry, winning a permission to award a lucrative contract for telecom equipment to Chinese company Huawei. A government panel, which included representatives from IB and the defence ministry, has endorsed BSNL’s position and allowed the company to place orders with Huawei for only southern states as they have no international land borders.

ET had reported earlier this week that both IB and the defence ministry had cited security concerns to argue against any Chinese company being given BSNL contracts to provide telecommunication equipment. BSNL had shortlisted Huawei and Swedish company Ericsson for its 93-million-line GSM expansion project worth around Rs 30,000 crore, the single-largest telecom contract in the world.

Ericsson was shortlisted as the lowest bidder for northern and eastern regions, while Huawei made the cut for the western, eastern and southern zones. The government had also set up a committee, comprising representatives from IB, the defence ministry, the department of telecom and intelligence agency RAW (Research and Analysis Wing), to examine the issue of participation of foreign companies, particularly with regard to security-related sensitivities, in BSNL tenders.

“This committee has given us nod to place orders with Huawei, but only in south India,” a top BSNL executive told ET. The logic: southern India do not share sensitive borders with countries, such as Pakistan, China and Bangladesh. Besides, Huawei is already working with BSNL in south India. But an IB official, while objecting to the Chinese presence, had said that given the security situation in the country, even the southern region, because of its coastline, can be considered sensitive. Moreover, he argued, distinction in terms of zones is irrelevant in the communication sector. It is not clear what caused the change in thinking.

“Ericsson will be given the contract for 43 million lines, of which 25 million will be for north India, while the remaining 18 million will be for the eastern region. Huawei will get the contract for 25 million for southern states,” the executive said, adding the final price would be determined only after negotiations with Ericsson and Huawei.

It is estimated that that Ericsson’s contract is worth a little under $3 billion, while the value of Huawei’s order will be about $1.5 billion. The BSNL contract is split into three parts of 25 million each for the northern, southern and western zones, and 18 million for the eastern zone. The tender conditions also stipulate that one company cannot be awarded more than two zones, implying that the maximum order an equipment maker can bag is for 50 million lines.

The BSNL executive also said that the committee did not open the bids for the western region for three reasons: Huawei is the only company shortlsited for this region, but since western Indian states share sensitive boundaries with Pakistan, the contract cannot be awarded to the Chinese firm. Moreover, Ericsson has been ruled out as it has already been selected for the north and the east.

Finally, the panel has not taken a decision on measures that must adopted when awarding contracts, including conditionalities, in sensitive areas. IB had said that BSNL should not award contracts to Chinese telecom equipment companies, as “these firms were known to have links with the Chinese state and security apparatus and, therefore, their presence in this critical sector has national security implications in a variety of ways.”

The defence ministry, too, had objected and said that “Huawei has been set up with the assistance of the Chinese army and has a tainted past in addition to being black-listed in the US. Similarly, the other Chinese company ZTE also does not have a good track record and in any case these two companies should not be allowed to come in any part of the country.

Bharti Airtel reaches 100 million customers mark

15 May 2009, 1609 hrs IST, PTI

NEW DELHI: Bharti Airtel today said its subscriber base has crossed the 100 million mark, making it the world’s third largest ‘in-country’ mobile operator.

The milestone makes every fourth mobile phone user in the country a customer of Bharti Airtel, founded in 1995 as Bharti Tele-Ventures.

“The Indian telecom sector is seen as providing the most affordable services in the world has grown by leaps and bounds in the last decade.

“We are proud to have led the telecom revolution that made a positive impact on the lives of people in every corner of the country as well as the Indian economy,” Bharti Airtel Chairman Sunil Mittal told reporters here.

The company’s equipment partners Ericsson and Nokia- Siemens and nearly 31 per cent equity partner Singtel were present on the occasion to mark the milestone.

“This remarkable journey to 100 million customers is a testament to the vision and commitment of the company that benchmarks itself with the best in the world,” Mittal said.

Besides 25 per cent subscriber share, Bharti Airtel enjoys 30 per cent market share in terms of revenue. It’s only behind two Chinese operators in terms of subscriber size measured within a country. Noting that it has been adding more than 3,000 base stations in a month, Mittal said for the first time, an Indian company has emerged a dominant player in the world and that too was in the telecom sector.

Telecom sector may be hit as recession bites

Business Daily from THE HINDU group of publications Thursday, Apr 09, 2009 Thomas K. Thomas

New Delhi, April 8 Indian telecom sector, which has so far remained untouched by the slump in the global economy, could see the growth rates slowing down by the end of the year. Thanks to households postponing spending, the growth rate of mobile handsets could fall by as much as 50 per cent and also see a decline in new subscriber additions compared with 10 million new subscribers a month at present.

According to Mr Prashant Singhal, telecom industry leader at Ernst & Young, the handset sales growth in 2009 is expected to be in the region of 13-15 per cent, down from 26 per cent last year.

“Yes, the Indian telecom industry has been impacted to some extent by the current global slowdown. In the current economic environment, many corporates are re-negotiating the rates they pay to telecom operators. Though subscriber numbers are still growing at well over 10 million a month, revenues are not rising commensurately. Also, it will be a challenging market for mid- to high-end handset makers this year. In high-end phones, sales will be defined more by need rather than desire of the user.”

While most operators claim that the telecom growth story is intact for another 3-4 years, they privately admit that the liquidity crunch may have an impact in 2010. “Most of the growth in mobile usage is coming from non-urban areas driven by a large population of employed youngsters. However, if the liquidity crunch continues then these youngsters may not find employment easily, which in turn will impact their expenditure on communications services,” says a Mumbai-based multinational GSM operator.

Cost-cutting measures
Though the industry is not losing sleep yet, they are undertaking cost-cutting measures such as infrastructure sharing and internal restructuring. “Reflecting its proactive approach, Ericsson has had a cost reduction programme in place since 2008 which well exceeded set targets. The present economic condition is helping us drive better focus across the various teams and functions internally. Conscious decisions are being taken to curb costs by increasing the use of Web effectively – through webinars and Web conferences, thus seamlessly connecting across geographies and different time zones. However, we expect the telecom scenario in India to be in growth mode for the next few years,” says Mr P. Balaji, Vice-President (Marketing & Strategy), Ericsson India.

Some rule out any impact

However, some of the players completely rule out any impact on telecom. “Look at it from the customers’ perspective — slowdown or not, they need a communication device under all circumstances; to share their thoughts, worries, good news or even for a general discussion. So, the demand for telecom services remains strong, and that is evident in the strong growth that the sector continues to enjoy. In fact, telecom usage in innovative ways is actually increasing through the long-drawn recession, as it becomes a cost-effective alternative to business expenses such as travel and lodging, etc,” says a spokesperson for Tata Teleservices.
But Mr Singhal sounds cautious. “This is a time for telecom operators to take a close look at their internal structure. In the last couple of years of sharp growth, large operators have added between 3,000 and 7,000 new employees. This is an opportunity for such operators to look to achieve a greater level of efficiency in their operations.”

Market watchers point out that the onus will be on the new government to launch next generation reforms in the telecom sector to sustain the growth story. “A large number of policy initiatives, which could have helped the industry to overcome the current economic crisis, are awaiting Government approval. There should not be any more regulatory uncertainties,” says a Delhi-based telecom player.