It’s official! BSNL cancels Rs 9,000-cr 4G tender. How will this impact its revival?

• The decision comes after the DoT (Department of Telecommunications) decided to issue fresh specifications for the upgradation process

• A fresh tender is likely to be issue by the DoT in the next two weeks after the six-member committee set up by the department reviews the upgradation requirements

New Delhi: State-run BSNL (Bharat Sanchar Nigam Limited) has cancelled its Rs 9,000-crore 4G tender on Wednesday in the backdrop of the Centre's push for Make in India amid India-China confrontation. A notice for cancellation of the tender accessed by PSU Watch said, "Tender for planning, engineering, supply, installation, testing, commissioning and annual maintenance of 4G mobile network in north, east, west and south zones of BSNL and Delhi and Mumbai LSA of MTNL on turnkey basis…issued on 23.03.2020 is hereby cancelled."

The decision comes after the DoT (Department of Telecommunications) decided to issue fresh specifications for the upgradation process.

BSNL to float new 4G tender in two weeks

A fresh tender is likely to be issue by the DoT in the next two weeks after the six-member committee set up by the department reviews the upgradation requirements, submits its report, a source told PSU Watch. The new 4G tender is likely to exclude Chinese telecom equipment makers from the process as India seeks to tighten the noose around Chinese imports. China-based Huawaei and ZTE are two big telecom equipment makers who supply telecom gear to most of India's telecom companies. 

The government had asked BSNL to not use Chinese equipment for the 4G upgrade, days after 20 Indian soldiers were killed in a skirmish with Chinese troops along the LAC (Line of Actual Control). 

The backdrop

The matter pre-dates the Indo-China confrontation and was first stirred up by a letter sent by TEPC (Telecom Equipment and Services Export Promotion Council), the government body for the promotion of domestic telecom products, equipment, and services, to the DoT and DPIIT, in which it alleged that the BSNL 4G tender violates norms for procurement and favours foreign companies.

"BSNL and MTNL are ignoring Public Procurement (Make in India) Order of the government and tender floated has no provision for compliance of the government order," the letter said. It alleged that since public money was being used to revive BSNL, domestic suppliers of telecom network equipment should be encouraged to participate in the tendering process.

In the tender floated by BSNL on March 23, a clause sought bidders to have prior experience of setting up a 20 million subscriber network. This was at the heart of the grievances raised by TEPC which claimed that this would disqualify domestic producers of telecom equipment from submitting a bid. However, as tension between India and China mounted along the border, the Centre, in a bid to choke Chinese imports, started an aggressive push for Make in India. In the backdrop of this scenario, it was quite unlikely for the Centre to allow a public sector company to procure equipments from China.

Delay in tender process may have consequences for BSNL's revival

The 4G tender floated by BSNL on March 23 was the first tender floated by the company since the government shelved a plan to disinvest the state-run company and decided to invest Rs 70,000 crore in its revival. The telco is already four years behind its competitors in terms of offering 4G services as it had been waiting for a 4G spectrum allocation so far. Now that the tender has been cancelled, it will delay the 4G rollout further, impacting BSNL's revival and its ability to survive the competition in the market. 

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