4G tender delay: BSNL seeks concessions on domestic vendor clause

It’s going to be a year since BSNL first floated its tender for 4G network, which was cancelled to give preference to domestic vendors, but the impasse related to the finalisation of the second one continues with the company expressing its inability to meet the conditions recommended by a government-appointed committee. Exasperated, the company has communicated to the government that if it has to meet all the conditions stipulated by the committee then it would take another two years time for it to roll out the 4G network.

The problem areas for BSNL are that it has been asked that the core of the 4G network should be built by domestic vendors under a system integrator model and not global firms like Ericsson or Nokia. Further, the IPR or licence/copyright for the source code of the software should be owned by an Indian company and it must have unrestricted, irrevocable access and licence to modify the source code and provide software support for all future versions of the software. The source code should be deposited in an escrow account and should be the same as the version deployed in the field.

Expressing its inability to meet these guidelines, BSNL has now proposed a few options to the government as a way forward, like floating a new tender with commercial specifications allowing open bidding and simultaneously upgrading its around 49,300 sites, including those which have been built by Chinese vendor ZTE.

Sources said that apart from the department of telecommunications, the company has also communicated these points to the Prime Minister’s Office (PMO) recently.

The latest communication from BSNL comes as most of the Indian manufacturers have indicated that they need more time to develop their product. Also, majority of the firms have expressed that the proof of concept (PoC) or trials can’t be completed in the stipulated timeframe of four months. Sources said that firms like Tech Mahindra, TCS, Sterlite, Mavenir, HFCL, etc, have suggested a timeline ranging from 6-8 months for doing PoC.

BSNL expects 4G rollout within a period of 10 months on successful completion of PoC. Assuming that PoC is successfully completed in four months, the network can be rolled out after 14 months from that date. But, in case PoC is not completed within the specified timelines then rollout timelines may also get extended.

Sources said as a way forward, BSNL has proposed that PoC may be limited to one zone or a few circles for 4G network rollout. Meanwhile, it should be allowed to proceed with tender with PMI clauses as per DPIIT guidelines, industry specifications and a modified GFR (general financial rules) clause pertaining to neighbouring countries. Another option proposed by BSNL is to let it upgrade its 49,300 sites, including 36,100 sites of ZTE, to 4G. It will allow the firm to roll out 4G at these sites in six months.

Yet another option suggested includes continuation with the PoC route but upgrade 13,200 sites of Nokia and as a fall back arrangement, and issue a tender with commercial specifications.