Ericsson bags $1.3 bn BSNL contract for GSM lines

NEW DELHI: Public sector BSNL has announced that it would invest Rs 22,881 crore this fiscal on expanding operations and added that it had awarded a Rs 5,200-crore contract ($1.3 billion) to Swedish equipment major Ericsson for 13.12 million GSM lines.

BSNL’s new CMD Kuldeep Goyal told mediapersons that orders for the first phase of the tender involving 22.75 million lines has been finalised and Ericsson had accepted the letter of intent (LoI) for 13.12 million lines.

“The work is to be completed in 12 months and the LoI for remaining 9.62 million lines is being issued to Nokia (Siemens) shortly. Ericsson will supply 13.12 million lines at Rs 3,700 ($90.94) per line,” Mr Goyal said. As per the tender agreement, Nokia Siemens will have to match the price agreed to by Ericsson.

Meanwhile, Ericsson in a statement said that it had won the contract valued at $1.3 billion to supply GSM and WCDMA/HSPA equipment and related telecom services to BSNL. Under the agreement, Ericsson will be responsible for the expansion and upgrade of BSNL’s existing GSM network and introduction of WCDMA/HSPA functionality, the Swedish major added.

BSNL’s Rs 22,880-crore capex for this fiscal is part of the Rs 60,000 crore that the company plans to invest over the next three years to expand operations and double its turnover. Giving a breakup of this capex for this fiscal, Mr Goyal said that about Rs 7,417 crore will be towards mobile services, Rs 6,200 crore will be for fixed lines, WLL and broadband and internet will get about Rs 6,200 crore while value-added services would get Rs 9,230 crore.

Last year, the company’s revenues had crossed Rs 40,000 crore and Mr Goyal said that the PSU would generate a profit of Rs 8,000 after taxes. Mr Goyal also said that BSNL would soon introduce internet telephony services which would allow broadband users to call abroad for Re 1 per minute.

“We have already asked for the expression of interest (EoI) for Voice over Internet Protocol. We will shortlist and tie up with players who can offer us technical support to offer these services within the next two months, and hope to launch internet telephony within the next four months,” he said.

He also said that the PSU would ‘soon’ float a tender for WiMax while adding that the company was all geared up to offer IPTV services in major cities such as Pune, Kolkata and Bangalore. With regard to broadband, Mr Goyal said the company would add around two million broadband connections this fiscal.