A committee head by Mr Sam Pitroda, advisor to the Prime Minister, has told Bharat Sanchar Nigam Ltd to scrap the controversial 93-million-line GSM equipment contract.

The panel has suggested that the PSU instead of buying the entire network equipment the traditional way, should adopt the managed services model as was being done by private telecom players, including Bharti Airtel and Vodafone.

Managed serviced model

In managed services model, the cellular network is planned, installed and managed by the equipment vendors leaving the operator to focus on marketing its services. While most of the private operators have adopted this model, BSNL and MTNL still continue to buy the network gear and then manage it by themselves.

The entire procurement process was referred to the panel headed by Mr Pitroda, after BSNL's mega project ran into one controversy after another. It started with BSNL disqualifying three of the five bidders including Nokia Siemens and Alcatel Lucent. Only Ericsson and Huawei were shortlisted. Following the disqualification, Nokia Siemens challenged the process in the High Court.

Even as legal proceedings were going on, the Central Vigilance Commission (CVC) also stepped in to investigate allegations that BSNL had not followed the right process in deciding the multi-billion dollar contract. The Government was also not convinced that BSNL was getting the best price since there was only a single bidder who qualified in each zone.

Though Ericsson dropped its quoted price by 40 per cent, DoT representatives on BSNL board objected to giving the contract to the Swedish company. CVC subsequently also recommended that BSNL should scrap the tender. The matter was then referred by the PMO to the Sam Pitroda committee.

Extension contract

According to sources, BSNL could now give extension contract to existing vendors who had supplied GSM equipment in the last tender. There is a proposal to give Ericsson a contract for supplying GSM gear for supporting 15 million new users under the earlier contract. BSNL can order up to 40 million lines under the previous tender.

 source:businessline