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.

BSNL set to invite fresh tenders to run WiMax ops

3 Jun 2009, 0223 hrs IST, Joji Thomas Philip, ET Bureau

NEW DELHI: India’s largest telecom firm BSNL will invite fresh tenders to run its WiMax operations, after the previous attempt was aborted in light of dubious operators making it to the final shortlist. The state-run firm will now seek fresh bids for franchisees across the country to roll out technology that allows users wireless access to high-speed internet and other data applications

 over a large area, according to two top executives of the company. BSNL expects WiMax to generate multi-billion dollar revenues over the next 10 years.

ET had reported on February 20 that a string of ‘shell’ companies that exist only on paper had made it to BSNL shortlist for WiMax.

The telco subsequently cancelled the 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 came under pressure from its labour unions to scrap the tender following reports of wide-scale corruption in the methodologies adopted to shortlist successful bidders. Doubts were also raised on the disqualification of several companies with proven track record of offering WiMax services including Soma Networks, Cisco-backed Terracom, Unwire India and Welcomm Communications — it had a tie-up Huawei and Aricent — in the earlier shortlist.

This has strengthened the allegations of a possible scandal especially since BSNL had failed to provide valid reasons for the disqualification. During the recent election campaign, opposition BJP had alleged that five of the six shortlisted companies were promoted by telecom minister A Raja’s confidant Sanjay Kapoor and had sought a CBI probe into the issue.

“BJP demands that allotment of BSNL’s WiMax franchise should be suspended immediately and the telecom minister be sacked as reports suggest wholesale loot and corruption in the process,” party spokesperson Prakash Javadekar had said during a press conference in Delhi on May 6.

Earlier this year, the WiMAX Forum, an industry association that has more than 530 member companies globally and 50 members in India had warned BSNL that companies existing only on paper are exploiting lax eligibility criteria for bids invited by the telco for franchisee operators for its WiMax services.

The Forum had also alleged that these newly floated front companies have approached global majors to buy them out quoting BSNL’s spectrum and network assets as valuation criteria. “This is a result of the lax eligibility conditions in the tender which these paper companies are exploiting,” the association had said.