Indian state-owned telco BSNL’s recently issued 5G tender has reportedly been poorly received by potential bidders – particularly by Ericsson and Nokia, who are unhappy with BSNL’s plan to use only indiginous gear to build the network.
Under the tender, BSNL plans to launch standalone 5G in Delhi across 1,876 sites using the 900-MHz and 3300-MHz bands. According to the Financial Express, citing unnamed “informed” sources, Ericsson and Nokia attended a pre-bid meeting held by BSNL last Thursday, along with 27 other local firms including L&T Technology, TCS, Tejas, VVDN, Lekha and HFCL.
However, the government has required BSNL to use indigenously produced technology to roll out 5G. The same requirement applies to BSNL’s ongoing 4G rollout.
Ericsson and Nokia reportedly asked BSNL to amend those conditions so that they can participate in the tender. However, the report said, government officials are not likely to allow it, as they are focused on boosting India’s domestic telecoms equipment sector.
The report notes that both Ericsson and Nokia are seeing a sharp decline in orders for 5G gear now that Reliance Jio and Bharti Airtel have completed their initial rollouts, leaving only Vodafone Idea as the main prospect for 5G sales.
Ericsson and Nokia aren’t the only ones critical of BSNL’s tender conditions. At last week’s meeting, domestic vendors complained about the tender’s revenue sharing arrangement.
The company intends to deploy 5G services on a revenue share model, wherein BSNL would get a minimum 70% share of revenue, with select vendors getting whatever is left. At the meeting, vendors said that’s way too high, given the high initial investment required from bidders, the report said.
That initial cost includes a bid security of INR5 million (US$59,345) for MSMEs and startups, and a INR30 million performance bank guarantee. Vendors said the former should be dropped and the latter reduced.
The vendors counterproposed that BSNL should only get 30% of revenues, and that the revenue sharing arrangement should only start two years after the 5G service goes live, on the grounds that it takes time to build up a customer base. BSNL will also be going up against firmly established 5G offerings from Jio and Airtel.
They also asked BSNL to remove a condition that allows the telco to terminate contracts if minimum revenue is not shared by vendors for three years.
BSNL agreed at the meeting to extend the deadline for bid submissions to December 16, the report said.
