BSNL places orders for GSM equpment after four-year delay

Mobile customers of state-owned telecom operator BSNL can now look forward to better quality of service in North and South India as the company has finally placed purchase orders for equipment after four years.

BSNL has been facing controversies and delays in purchasing new GSM equipment for the last 4 to 5 years due to allegations that the tender process was not fully up to the mark. Various vendors had complained about BSNL’s purchasing process, even going to the courts to challenge disqualification of their bids etc..

BSNL used to be India’s biggest telecom company, but a crippling shortage of equipment, poor marketing and relatively higher tariffs have seen its mobile services lose market share to roughly just 10% now. Bharti Airtel now leads the mobile market with about 22% of the market.

Unlike private operators, who could move with speed to buy equipment, BSNL’s procurement tends to be slow and lumbering as purchase orders, which are often worth several hundred million dollars, sometimes go all the way up to the Central minister for final approval.

Due to the size of the orders, equipment makers who are disqualified from the bidding process for various reasons such as not having enough domestic capacity etc., challenge the decision in courts, and the process is held up for months, if not years.

“BSNL could not procure equipments for the last four years because of non-finalisation of its tenders owing to complaints from the vendors. New tender has now been finalized and purchase orders have been placed for North and South Zones. BSNL is also taking action taken to place purchase orders for other two zones early,” the government told the Rajya Sabha in a written reply.

MTNL, the other state-owned operator, however, is not facing any capacity crunch, the government added. MTNL has been losing market share faster than BSNL, partly as its service quality is considered to be inferior to that of its bigger sibling.