In yet another blow to Bharat Sanchar Nigam Ltd's mobile rollout plans, the Central Vigilance Commission has told the PSU that it should scrap the ongoing tender for buying GSM equipment to support 93 million subscribers.

The CVC has suggested that the telecom company could go for a quick re-tender for procuring the gear.

BSNL has been through one controversy after another ever since it floated the $10 billion tender in 2007 for buying GSM and 3G equipment as part of its expansion plans. The latest salvo from the CVC could be the final blow as the PSU may now have no option but to call for fresh bids. A final decision on this issue is yet to be taken, according to sources.

BSNL's mega project had hit rough weather after it disqualified three of the five bidders on technical grounds. Ericsson and Huawei were the only ones who were shortlisted for the contract. Those disqualified included Nokia Siemens, Alcatel Lucent and ZTE. Nokia Siemens challenged the disqualification in the courts on the grounds that it had been supplying equipment to the PSU in the past and, therefore, met the requirement.

Second blow

The second blow came after the security agencies told the PSU that it could not buy telecom equipment from any Chinese vendor, which put the lid on the offer from Huawei.

With only Ericsson let in the fray, the PSU tried to negotiate a better price from the Swedish major. Though Ericsson lowered its offer by almost 40 per cent from what it had quoted initially, the Department of Telecom opined that BSNL may not get the best price since there was no competitive bidding. The CVC also entered the picture and started investigating whether BSNL was following laid down process for buying equipment. The entire process was put on hold after the CVC started investigating the matter.

If BSNL goes for fresh bidding, it will give a second chance to other vendors to better the earlier offer. But, in the meantime, the PSU is losing market share in the mobile segment sliding from number 4 position to number 6 over the last two months.

Source:thehindubusinessline