Tata switches on pioneering 3G network in India as BSNL claims sabotage

 As part of its drive to become India’s first private-owned 3G operator, Tata Teleservices Ltd (TTSL) has stated that by the end of the year, it will have inaugurated 3G networks in all nine of the circles for which it holds 3G spectrum.

The managing director of TTSL, Anil Sardana, confirmed that 25 towns would begin enjoying 3G coverage from today, and that within the year, cover would be extended to another 125 – 150 towns.

The 3G spectrum for the networks cost TTSL a total of INR58.64 billion (US$1.3 billion) at auction, and Sardana stated that the firm has a budget of US$500 million to deploy the network. The operator is in talks with competitors to agree roaming deals so that it can extend its 3G network beyond the nine circles for which it holds licences.

The network will be deployed by Tata Docomo, a subsidiary of TTSL which primarily operates using GSM. The prices of the 3G services have not been confirmed.

Although TTSl will be the first private-owned operator to launch 3G in India, it faces stiff competition from Bharti Airtel, which not only holds licences for a greater number of circles (13 in total, including key cities such as Delhi and Mumbai) but is also planning to launch its network by the end of the year. The start of 2011 will see Vodafone Essar entering the fray as well.

As the privately owned operators switch on services, the state operator BSNL is notably lagging behind – and has reportedly accused foreign vendors of attempting to sabotage its business.

The general secretary of operator’s workers union (SNEA) has written an incendiary letter to the Indian prime minister in which it is asserted that a consortium of foreign vendors, among them such major players as Ericsson, Nokia Siemens Networks and Motorola, have colluded to obstruct BSNL’s acquisition of network equipment.

The letter, written by SNEA’s GL Jogi, claims that the vendors – in league with BSNL’s competitors - are attempting to sabotage the state operator’s business in order to protect their own interests: "It does not need a meticulous analysis to conclude that vendors like Motorola, Ericsson, Nokia, etc, have been acting in tandem with the competitors of BSNL, from time to time, depending on their hidden and sinister business interest, to completely wipe out BSNL from telecom business.”

Vendors have responded by highlighting both the inaccuracy of the allegations and the lack of evidence on which they are based. NSN has pointed to its “unwavering support” of state and private operators in India, while Ericsson has stated that “the allegation that western vendors are maligning BSNL is baseless.”

Regardless of their veracity, SNEA’s claims are unlikely to improve BSNL’s relationships with potential equipment providers, which have distinctly soured since the operator’s network expansion tender was launched in 2008.

The perennially-delayed process has attracted its share of controversy, most recently with Ericsson retracting its application for the latest tender due to a dispute over security requirements.

Interestingly, the three firms named in the letter have all brought legal action against BSNL; Ericsson has recently filed a case due to alleged indiscretions relating to the tender process, while NSN and Motorola both filed cases upon being rejected for technical reasons after applying for previous tenders.

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