BSNL drops plan to bid for Tunisia license

14 Jun 2009, 1159 hrs IST, PTI on www.economictimes.com

NEW DELHI: BSNL has dropped its plans to bid for telecom licence in Tunisia as the PSU finds the returns not enough to enter that market through bidding of licence.

“We did not bid for Tunisia… we did not find returns on our investment,” a senior BSNL official said.

Earlier the PSU’s CMD Kuldeep Goyal had said BSNL was planning to bid for telecom licence in Tunisia and get 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.

BSNL official said the minimum bid price was understood to be $10 million but the Tunisian market is well- penetrated with 80 per cent of the population owing mobile phones leaving not much scope for more 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 has 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, JVs 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 the next couple of months.

BSNL to invest Rs 15,000 cr in FY10

Virendra Singh Rawat / Lucknow June 11, 2009, 0:56 IST on The Business Standard

Public sector telecom giant Bharat Sanchar Nigam Limited (BSNL) will invest Rs 15,000 crore this fiscal to upgrade its infrastructure and roll out new value-added services.

“Our capital expenditure in different verticals this year would be around Rs 15,000 crore,” BSNL CMD Kuldeep Goyal told Business Standard.

BSNL will use the investment for mobile expansion and for services like 3G, broadband, wireless broadband, IPTV, WiMAX, mobile commerce (m-commerce), value-added landline, Enterprise Resource Planning (ERP) and others.

“Our aim is to add 35 million telephone lines by the end of this fiscal across the country and to commission fresh 3G network,” he added.

BSNL had launched 3G services on February 2 and, at present, it is available in 70 towns. “We plan to provide 3G services in 700 cities by the end of calendar 2009,” Goyal said.

He added that, for achieving the targeted mobile growth, more spectrum was needed by operators.

“The availability of spectrum for mobile phone operators in general is less than other countries. However, this has not affected the quality of services being offered,” he claimed.

“We will offer wireless broadband through WiMAX technology in 1,000 blocks of the country out of the total 6,000 blocks. The state-run telecom operator will roll out franchisee-based WiMAX service in the country, starting with Gujarat, Maharashtra and Andhra Pradesh.

“We have floated tenders for offering similar a WiMAX service in other states as well,” he said. “We are also working on improving our quality of service and have engaged AC Nielson to test the quality of our mobile service,” Goyal added.

Telcos dial Africa for new pastures

Manoj Gairola, Hindustan Times on June 7, 2009

After tasting success in domestic markets, it’s ‘Dial Africa’ for Indian telecommunication companies. And it’s not the high-profile, twice-rejected MTN alone that’s attracting Indian firms.

While the government-owned Mahanagar Telephone Nigam Ltd (MTNL) is in advanced discussions for telecom licences in four countries, Bharat Sanchar Nigam Ltd (BSNL) is formulating its strategy to enter the continent.

Adding their bit are the Essar group, Tata Communications and Reliance Communications, all of which have licences for telecom services in African countries and are looking to expand their operations.

Bharti Airtel is negotiating with South Africa-based MTN for a “two way deal” that would allow it to own 49 per cent equity in South African giant MTN.

“We are evaluating a proposal to acquire a company that has licences in four to five countries,” said R.S.P. Sinha, chairman and managing director (CMD), MTNL. “Africa is a lucrative market and we would like to acquire a licence through auction if there is an opportunity.” However, in most countries, licences have been auctioned.

“Funding is not an issue for our Africa expansions,” Sinha said. “We have done all the ground work.” MTNL is presently a service provider in partnership with Tata Communications (formerly VSNL) and Telecommunications Consultants India Ltd (TCIL). “We will enter into Africa on our own,” said Sinha.

MTNL not the only government-owned company eyeing the African market. “We are looking at an expansion in Africa,” said Kuldeep Goyal, CMD, BSNL. “Whenever we find right opportunity we will grab it.”

Essar group has acquired a telecom licence in Uganda. “Africa is an important market for Essar’s telecom business and we are working towards building a strong brand in this market,” said Srinivas iyengar, CEO, Essar Telecom Kenya. “We would be looking at opportunities to establish a pan Africa footprint in future.”

The company plans to offer services in a joint venture with a local company, Kenya Telecom Uganda Ltd. It already has a licence in Kenya and plans to expand in other countries.

“We find African markets promising and have recently hiked our stake in Neotel (of South Africa) to 56 per cent from 26 per cent,” a senior Tata Communications official said. “We view this as a beach head to the rest of the African markets as and when right opportunities arise.”

Why Africa?

“African countries have just started moving on the development path,” said RK Upadhyay, CMD, TCIL. The company has been executing telecom infrastructure projects in Africa for past 20 years and is present in 30 countries. “There is expected to be enormous growth in telecommunications in next five years. Whenever, development takes place in a developing economy, the need for telecom services increases,” Upadhyay said.

“Africa has a low teledensity and high average revenue per user,” said Goyal. This explains why Indian providers want to go to. India has a teledensity (number of telephones for a population of 100) of about 40 per cent. In many African countries the teledensity is below 20 per cent (See table).

Besides, the continent’s average revenue per user is high. Against Rs 250 per month in India, the number in some African countries including is about three times as much.

Reliance has a licence in Uganda for offering mobile, fixed line, Internet, national and international long distance services, in addition to WiMax and Wifi services. It plans to acquire licences in other countries, a senior official said.

BSNL to seek foreign tie-ups to revive manufacturing units

6 Jun 2009, 0052 hrs IST, Joji Thomas Philip, ET Bureau

NEW DELHI: BSNL will seek foreign collaboration to revive its six telecom equipment manufacturing units spread across three cities — Mumbai, Kolkata and Jabalpur. The telco will soon invite expression of interest (EoIs)

 from global players to form JVs to manufacture mobile equipment. The JVs may include a technology transfer clause and may also stipulate that the foreign partner can invest in new machinery, according to BSNL executives familiar with the development.

The PSU may also mandate that bidders should be full-fledged players with expertise in design, development, manufacturing, supplying and marketing of telecom-related equipment for at least three years, the sources added.

“Currently, we make very little equipments. We are looking at collaborations with equipment companies for these factories. We can make mobile-related equipment and broadband products, such as modems,” BSNL chairman and managing director Kuldeep Goyal told ET. BSNL is the only service provider that runs manufacturing facilities also, but its factories are in a state of disarray as it lacks technology to compete with global hardware majors.

BSNL had tried a similar experiment in late 2006, when it selected Chinese equipment major ZTE to set up a 50:50 JV to revive its Kolkata plant. The PSU had shortlisted Chinese majors ZTE and Huawei, but the latter lost out in the final selection process. Despite talks between BSNL and ZTE reaching the final stages with both the companies deciding to manufacture a million CDMA mobile handsets and an equal number of fixed wireless terminals.

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.