India-China border tension impact! BSNL cancels Rs 8,697-crore 4G tender

BSNL has cancelled its Rs 8,697-crore 4G tender floated in March. Though the company has not given any reason for the cancellation, the move is speculated to have been a result of the heightened India-China border tension and Niti Aayog’s suggestions to allow only locally designed and manufactured equipment for the 4G rollout.

BSNL was opposing any move to bar foreign suppliers, including Chinese firms Huawei and ZTE, from participating in the tender. ZTE currently controls around 60% share in BSNL’s network (2G+3G), while the remaining is held by Nokia, Ericsson and Huawei, together. Though the Department of Telecommunications (DoT) has not taken any decision to bar Chinese firms or other global players from participating, it has formed a committee to recommend technical specifications for the revised BSNL 4G tender.

The eight-member committee, headed by DoT member (technology) K Ramchand, will help BSNL in refining the technical specifications of the tender for 4G services, and also recommend core domestic network components that can be deployed in its network. The report of the panel is expected in a couple of weeks.

In the wake of the anti-China sentiment, the committee will also deliberate whether to invoke Clause 10(d) of the Make in India norms, notified in 2017. According to the clause, if a nodal ministry is satisfied that Indian suppliers of an item are not allowed to participate or compete in procurement by any foreign government, it may restrict bidders from that country.

Recently, the government has hardened its stance on Chinese vendors and any decision regarding their participation must be approved by a home ministry-led inter-ministerial panel. Apart from the Chinese factor, the tender was mired in controversy because of a complaint from the Telecom Equipment and Services Export Promotion Council (TEPC), alleging that BSNL had not followed the public procurement (preference to Make In India) norms. The main concern raised by TEPC was that conditions were formed in such a manner that no Indian company could participate. After the TEPC complaint, the tender was put on hold by the government.

Meanwhile, Niti Aayog recommended that only locally designed and manufactured products should be deployed by BSNL for its 4G roll-out, and the state-run firm should redraft its tender to support local models of equipment. The government’s policy think tank had held a meeting on June 5 to deliberate on the possibility of deploying the 4G network of BSNL using indigenously designed, developed and manufactured (IDDM) products.

The meeting was attended by many local vendors in the telecom space like Tech Mahindra, Tejas Networks, Saankhya Labs, Signalchip, VNL, etc where they discussed about their products. After the meeting, it was decided that BSNL and the DoT must trust the Indian ecosystem and must provide opportunity to build locally designed and manufactured 4G products.