Alca-Lu may bag BSNL GSM contract for western zone; Huawei given go-ahead for south

19 May 2009

India’s Economic Times is reporting that state-owned telco Bharat Sanchar Nigam Ltd (BSNL) may now offer the contract for 25 million GSM lines to Alcatel-Lucent in the western areas of the country. The move comes after the operator was reportedly told it could not offer the contract to China’s Huawei on security grounds. It is understood that BSNL has received approval to offer the contract for the southern region to Huawei from a security panel comprised of representatives from the Intelligence Bureau, defence ministry and other intelligence agencies. The decision to allow Huawei to be awarded the deal for the south of the country is understood to stem from the fact that states in that region do not share ‘sensitive’ borders with countries including Pakistan, China and Bangladesh.

As a result of the decision it is now expected that French-US vendor Alcatel-Lucent, which had previously been reported as having been disqualified from the tender process, may win the contract for the western region. However, certain conditions may be imposed on Alca-Lu before the contract is offered, including requiring it to match the prices offered by Ericsson and Huawei, the only other two bidders for the western zone. BSNL may also insist that a significant portion of the 25 million lines be manufactured in partnership with public service unit Indian Telecom Industries.