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Unproven 4G Gear To Increase Cost, Delay Rollout: BSNL Tells DoT

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A DoT panel had recently suggested that BSNL buy core 4G network gear purely from local vendors, and also shift its focus to the 4G business instead of plain vanilla 2G and 3G services. But the state-run telco has resisted the suggestion, saying 2G services garner as much as 60 per cent of its revenues.

Unproven 4G gear to increase cost, delay rollout: BSNL tells DoTKolkata: The government’s Atmanirbhar Bharat push faces a serious challenge from one of its own. State-run telco, Bharat Sanchar Nigam Ltd (BSNL) has told the telecom department that forcing it to buy globally unproven 4G network gear from local vendors could delay its plans to roll out the high-speed data services by at least another 18 months, increase costs, throw up network quality issues and further reduce its survival chances in a fiercely competitive sector.

In a recent meeting, BSNL’s leadership has also told the Department of Telecommunications (DoT) it must not be mandated in isolation to buy core 4G network gear from local vendors, insisting that any such central directive must also automatically apply to the Big 3 private telcos – Reliance Jio, Bharti Airtel and Vodafone Idea (Vi) – to ensure a level-playing field.

“BSNL has voiced its concerns to its owner, DoT, that it must not be forced alone to buy unproven core 4G network gear from local suppliers, and that such indigenous procurement rules should also be applicable to all private telcos,” a top company executive told ET.

The DoT, he said, had also been told at a recent meeting that “forcing BSNL to use unproven locally manufactured 4G gear could derail the telco’s 4G rollout plans, causing uncertainties around service quality and costs, a scenario that “could potentially destroy BSNL’s chances of staying competitive”.

BSNL’s concerns, it is learnt, are likely to be discussed shortly by the Empowered Technology Group, headed by Prof K VijayRaghavan, principal scientific advisor to the government.

A DoT panel had recently suggested that BSNL buy core 4G network gear purely from local vendors, and also shift its focus to the 4G business instead of plain vanilla 2G and 3G services. But the state-run telco has resisted the suggestion, saying 2G services garner as much as 60 per cent of its revenues.

The differences have led to DoT reportedly accusing BSNL of deliberately delaying its 4G rollout, with both sides blaming each other for this and consequently continuing revenue and subscriber losses for the telco.

The world’s biggest 4G gear suppliers are Nokia, Ericsson, Huawei and ZTE, but following the government’s call coaxing BSNL to buy core 4G gear from local vendors, homegrown players such as Tech Mahindra, Sterlite Technologies and TCS have reportedly evinced an interest to participate in the company’s upcoming 4G network tender for over 50,000 sites.

Separately, BSNL has written to DoT that any experimenting with locally manufactured 4G gear should be done strictly on a pilot basis in a small market, and not on a pan-India basis. “We’ve written to DoT that if such pilots in a small, regional market throw up satisfactory results, then deployments can gradually be scaled up nationally in future,” the senior BSNL executive said.

BSNL insiders, though, did not hazard a guess on likely cost escalations if compelled to use local 4G gear. “Costs should rise as global vendors can offer better rates, given the economies of scale they command, but there have been no 4G gear transactions involving purely local vendors, so there is no immediate clarity around price discovery in such a scenario,” said another executive.

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