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Vigilance officials concerned over high quotation by bidders.
Apart from legal issues, Bharat Sanchar Nigam Ltd’s mega GSM contract for 93 million connections is now stuck on pricing issues.

BSNL’s internal vigilance officials have raised concerns that the bid amounts quoted by the two successful companies – Ericsson and Huawei – may be on the higher side.

While the two bidders have quoted above Rs 7,000 per line for 3G equipment, sources said the amount quoted for 2G gear is around Rs 3,000. This is only for supplying the radio equipment and does not include IT, software, billing solution or passive infrastructure.
Different Contracts

In comparison, BSNL had awarded the previous contract for less than Rs 4,000 (for 2G and 3G), which included all the other components of a cellular infrastructure, including towers and billing software.

According to BSNL officials, the vigilance officers have been told that negotiations are being undertaken with Ericsson to arrive at a lower price.

While Ericsson was short-listed for North and East zones, Chinese player Huawei had been picked for the South.
Specifications vary

But industry experts said though BSNL is well within its right to negotiate a low price, it may be unfair to compare the price quoted in the current contract with that of the previous phases. They said there were lot of differences in the specifications.

As BSNL is looking to ramp up its network for the future, it has sought more than double the traffic capacity in the current phase.

The vendors are required to offer maintenance of the network for seven years in this project compared to three years in the previous one.

BSNL has sought also the replacement of its network rolled out till 2007, which adds to the cost of the vendor.
Nokia suit

BSNL’s project got stuck after Nokia Siemens legally challenged BSNL’s decision to disqualify its offer.

Nokia Siemens has approached the High Court of Punjab and Haryana; and the High Court of Andhra Pradesh seeking a direction against BSNL.

The Andhra Pradesh High Court has given a stay on the contract for South zone.

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