BSNL gives Nokia a day for GSM deal
Bharat Sanchar Nigam Ltd (BSNL) and Finland-based Nokia, which has been in negotiation for the past three days on the GSM tender issue, have not reached an agreement so far.
It is learnt that Nokia is refusing to budge on the price front. The Nokia management believes that the $90 per-line cost offered by BSNL is a loss-making proposition.
Although Nokia made a conditional offer to BSNL last week, many of the terms are not acceptable to the government-owned telco.
Sources said that BSNL may wait for one more day for a formal reply from Nokia on whether it is willing to accept the order for around 10 million GSM lines at the price quoted by the lowest bidder, Ericsson. Nokia was the second-lowest (L2) bidder.
DNA Money had first reported on November 7, 2007, that Nokia is putting up a stiff resistance to the $90 per-line cost that BSNL is willing to pay the Finnish giant.
If Nokia turns down the offer, BSNL may offer the Finnish company's quota of 10 million lines also to Ericsson. Recently, Ericsson accepted the BSNL purchase order to supply equipment for around 13 million GSM lines at a price point of $90 per line.
As per norms, the second lowest bidder, in this case Nokia, must match the price that is being paid to the lowest bidder.
In a tender process last year, Ericsson was the lowest successful bidder at $107 per line, Nokia was second at $177 and Siemens at $446 per line. Subsequently, Nokia and Siemens announced a global merger. Motorola and ZTE were technically disqualified during the tender process.
The original plan of BSNL was to go for 60.5 million GSM line addition, out of which the ITI-Alcatel combine was to provide 15 million lines while the remaining 45.5 million lines were to be supplied by private vendors through a bid process.
However, when A Raja took over as the communications minister a few months ago, he decided to bring down the per line cost to below $100 and subsequently also halved the tender size.
source
It is learnt that Nokia is refusing to budge on the price front. The Nokia management believes that the $90 per-line cost offered by BSNL is a loss-making proposition.
Although Nokia made a conditional offer to BSNL last week, many of the terms are not acceptable to the government-owned telco.
Sources said that BSNL may wait for one more day for a formal reply from Nokia on whether it is willing to accept the order for around 10 million GSM lines at the price quoted by the lowest bidder, Ericsson. Nokia was the second-lowest (L2) bidder.
DNA Money had first reported on November 7, 2007, that Nokia is putting up a stiff resistance to the $90 per-line cost that BSNL is willing to pay the Finnish giant.
If Nokia turns down the offer, BSNL may offer the Finnish company's quota of 10 million lines also to Ericsson. Recently, Ericsson accepted the BSNL purchase order to supply equipment for around 13 million GSM lines at a price point of $90 per line.
As per norms, the second lowest bidder, in this case Nokia, must match the price that is being paid to the lowest bidder.
In a tender process last year, Ericsson was the lowest successful bidder at $107 per line, Nokia was second at $177 and Siemens at $446 per line. Subsequently, Nokia and Siemens announced a global merger. Motorola and ZTE were technically disqualified during the tender process.
The original plan of BSNL was to go for 60.5 million GSM line addition, out of which the ITI-Alcatel combine was to provide 15 million lines while the remaining 45.5 million lines were to be supplied by private vendors through a bid process.
However, when A Raja took over as the communications minister a few months ago, he decided to bring down the per line cost to below $100 and subsequently also halved the tender size.
source
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