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ZTE may be sole bidder for $715m deal
18 June 2012
Reports say rivals cannot match ZTE’s offer for $715m GSM contract with Indian operator BSNL
Indian state-owned operator BSNL may award a $715 million GSM equipment contract to Chinese equipment maker ZTE only, as against its earlier plan to distribute the contract among two rival vendors, according to local reports.
This development comes as Alcatel-Lucent, Huawei, Ericsson and Nokia Siemens Networks, which are Chinese’s vendors rival bidders, have refused to match ZTE’s lowest price of $50 a line, reported India’s Economic Times citing three people close to the matter.
BSNL announced a tender for 15 million lines in July 2011 to expand capacity of its 2G network and said it would award one vendor 60% of the work and another 40%. The change in strategy may delay BSNL’s plan.
Rakesh Kumar Upadhyay, BSNL chairman and managing director, told the Economic Times that it has placed advance purchase orders for the north and south zones with ZTE, while it will close detailed purchase orders soon by individual regions.
A senior executive at Huawei, which is the second lowest bidder, told the Economic Times that it may not accept the deal as it would not be feasible for them.
“It’s not just us. Everyone else who had bid higher than ZTE would also refuse because it’s unviable for all,” the executive added.
Upadhyay said if Huawei decline to accept these terms, BSNL will ask Alcatel-Lucent, the third lowest bidder, to deliver equipment.
Upadhyay added: “It’s a process we must follow. If none of the lower bidders accept, the contract will go to the lowest bidder.” GTB
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