With 4G tender facing hurdles, BSNL decides to upgrade existing 2G, 3G sites

The upgradation is likely to cost anywhere between Rs 3,500 crore and Rs 4,000 crore.

With BSNL facing hurdles in its 4G tender for deployment of 50,000 new sites, the state-run firm has decided to upgrade existing 2G/3G sites, so that 4G services can be offered to customers in the coming four-six months.
According to sources, the board of BSNL has approved a proposal to upgrade around 50,000 2G and 3G sites and the incumbent vendors — Nokia and ZTE — will be called soon to negotiate regarding the purchase order. After the placement of order, the company plans to rollout 4G services in the next few months. The upgradation is likely to cost anywhere between Rs 3,500 crore and Rs 4,000 crore.

The Department of Telecommunications (DoT) has asked for explanation from BSNL regarding the 4G tender after the Telecom Equipment and Services Export Promotion Council (TEPC) complained that public procurement norms for giving preference to Make in India products were not followed by BSNL while framing the eligibility criteria. The commerce ministry too has taken note of the complaint and has put the tender on hold till the grievance is disposed.

As the procurement of new 4G sites will be delayed, BSNL has decided to go ahead with upgradation.
“BSNL feels upgradation is the best option to save time. The board felt that 4G deployment through new tender can take anywhere between 18 and 20 months,” said a source privy to the board meeting details. Historically, it has been observed that any GSM tender from BSNL normally takes more than one year to finalise after floatation of tender. Thereafter, supply and deployment would take another eight months.

The sources further said subsequent to upgradation, the existing 2G/3G equipment will be able to provide both 2G/3G as well as 4G services, effectively protecting the existing investment, lowering requirement of OPEX, non-disruption of existing services.

Also, BSNL wants to fast-track the 4G deployment because once 4G spectrum has been allotted, it has to incur a cost of Rs 166 crore per month. “In case, it is not able to offer 4G services, it will be difficult to recover the costs,” said a source.

The source further said upgrading sites has certain inherent advantages like faster rollout of 4G services at around 60% of already working sites, most economical option which require lowest capex, big recurring opex saving, protects the investment already incurred by BSNL.

The government in October last year had approved a nearly Rs 70,000-crore revival package for the two state-run companies. The biggest chunk of the revival package — Rs 29,937 crore — was meant for voluntary retirement scheme (VRS) for employees above 50 years of age. Over 78,300 BSNL employees and 14,378 at MTNL had opted for VRS. The government has already released Rs 10,000 crore for making payments to employees towards the VRS, leave encashment, EPF and other related payments.