Even before the dust had settled over Bharat Sanchar Nigam Limited’s (BSNL) controversial 43 million line mega contract (which was finally scaled down to half), the company announced its intention of floating another large contract to meet its capacity requirements. With India’s telecom sector surging ahead and adding 8 million subscribers a month, the story is the same for all the key operators ?? Bharti Airtel, Reliance Communications (RCOM), Idea Cellular and Vodafone Essar ?? as they rush to expand, upgrade and better manage their networks.
Telecom vendors are doing brisk business, providing not only telecom equipment but also specialised management expertise. In the past one year, the volume of business given to Nokia Siemens Networks (NSN), Ericsson, Motorola, Alcatel-Lucent, Huawei and ZTE has been immense.
Here is a look at some of the bigger telecom contracts awarded in the past 12 months…
BSNL
BSNL’s vastly stripped-down 22.7 million GSM line contract is in the midst of controversy once again. And it has been that way for more than a year now. In September 2007, following several delays, a court case with Motorola and the intervention of the communications minister, A. Raja, Ericsson won 60 per cent of the contract (for 13.1 million lines) worth $1.3 billion. The contract for the remaining 40 per cent of the project has hit a bump with NSN (the second closest bidder) declining to supply the contracted amount. Bharat Sanchar Nigam Limited (BSNL) is now considering awarding the rest of the contract to either Nortel or Ericsson.
To overcome its severe capacity crunch, BSNL awarded a 4 million line cellular contract to Nortel, Ericsson and Nokia at an estimated cost of $250 million in February 2007. However, the size of the contract was nowhere close to what the company actually needed to ease the pressure on its network.
NSN bagged a greenfield rural tender from BSNL in October 2007 to deploy a broadband network across 7,000 villages.The new access network’s high bandwidth will allow BSNL to deliver high-data and triple-play intensive services such as videoon-demand, video multi-cast, internet protocol (IP) TV, video conferencing and virtual private networks to its customers. Earlier, in June 2007, NSN was awarded a three-year, 6 million line contract by BSNL for setting up broadband infrastructure across 17 states.
In November 2007, Sterlite Technologies received a Rs 1.43 billion contract from BSNL for supplying copper telecom cables. The cables will be used to improve BSNL’s pan-Indian basic telephony and broadband services network.
BSNL is planning to float two tenders of Rs 20 billion each for rolling out WiMax services. The first tender for launching Wi-Max services in rural India will be floated in December 2007. The second, for Wi-Max services in urban India, will be floated by January 2008. According to BSNL, the first project will be financed from the Universal Service Obligation (USO) Fund and will initially cover 25,000 villages. Under the project, broadband connections will be provided through the Wi-Max network to about 40,000 primary and secondary schools by 2008. About 50,000 Wi-Max kiosks will also be set up.The second project, which will cover over 70 cities, will be funded by BSNL itself.
Bharti Airtel
Bharti Airtel has been at the forefront of outsourcing network operations to equipment manufacturers such as Ericsson and Nokia. In August 2007, in one of the largest telecom deals ever, the company awarded a $2 billion, two-year supply and services contract to Ericsson. According to the contract, Ericsson will design, plan, deploy, optimise and manage Bharti Airtel’s network across 15 circles as well as the operator’s intelligent network platform for prepaid users across 23 circles. In addition, Ericsson will be responsible for the delivery of pan-Indian integrated device management solutions, enabling the use of advanced data services across the retail and enterprise segments.
The contract will take Bharti’s declared investment in telecom networks in 2007-08 to nearly $3 billion. In July 2007, Bharti awarded a $900 million, two-year contract to Finland-based NSN, which was the first multi-platform network contract to be awarded in India.NSN will expand Airtel’s GSM network in eight circles by installing 1.8 million network ports. It will also set up a prepaid international calling card service that will help Bharti Airtel add approximately 4.5 million users.
Apart for these contracts, Bharti Airtel signed deals with Alcatel-Lucent-owned Mobilitec, Germany-based CoreMedia, US-based Adamind and UK-based Apertio for its service delivery platform.Under the deal, Mobilitec will provide content management, CoreMedia will handle the digital rights, Adamind will handle transcoding and Apertio will provide the Parlay gateway. The service delivery platform will enable Bharti to offer all services related to content, messaging and applications through a single platform.Bharti has invested over $100 million for the delivery platform, which is expected to be fully operational by mid-2008.
To launch its IPTV service, Bharti tied up with UTStarcom in September 2007.The US-based telecom equipment vendor will supply its RollingStream end-to-end IPTV solution to Bharti Airtel.
Reliance Communications
In November 2007, RCOM signed a contract estimated at $500 million with Microsoft Corporation to offer IPTV services using the latter’s Mediaroom platform. The service, to be delivered through RCOM’s fibre optic network, will cover 13,000 towns and 500,000 villages in India. In September 2007, RCOM awarded a $1.5 billion turnkey contract to Japan’s Fujitsu to construct Flag Telecom’s next-generation network submarine cable, which will involve construction of four new cable systems across East Africa and the Mediterranean and Asia-Pacific regions.
In July 2007, RCOM awarded a $400 million contract to Alcatel-Lucent to expand its network to more than 20,000 towns and 600,000 villages. In the same month, the company signed a $200 million deal with Huawei Technologies, under which the latter will supply and deploy CDMA networks and base stations. Earlier, in March 2007, RCOM awarded Huawei a contract for about 4.5 million CDMA lines.
Idea Cellular
In February 2007, Idea signed a three-year contract with Ericsson for expanding its GSM network in the Maharashtra, Gujarat, Rajasthan, Madhya Pradesh and Himachal Pradesh circles. According to the contract, Ericsson will provide radio access, microwave transmission and nextgeneration mobile softswitch network architecture to Idea till November 2009.Ericsson’s network will enable Idea to make a smooth transition to 3G-ready networks after 3G spectrum is allocated.
In May 2007, Idea Cellular and NSN signed a $500 million GSM network expansion contract, valid for two years.Under the deal, NSN will expand Idea Cellular’s GSM/GPRS/EDGE networks across the Delhi, Haryana, Uttar Pradesh (East and West), Andhra Pradesh and Kerala circles. NSN will also supply GSM, circuit and packet core as well as intelligent network equipment. As a rapidly growing mobile service provider, Idea will benefit from the deal as it will lead to reduced overhead costs and bring greater focus to the company’s core functions. In May 2007, the value of Idea’s $500 million equipment sourcing order to NSN was raised to $1 billion.
Taking a cue from Bharti Airtel, Idea has also taken the managed outsourcing route. In July 2007, Idea Cellular signed a 10-year, $50-$55 million contract with IBM. Under the contract, IBM will deploy and maintain Idea’s interactive voice response (IVR) system, self-service infrastructure and processes. The agreement will enable Idea to set up an IP-based IVR system for end-user self-service. This is the second outsourcing agreement between the two companies. Earlier, Idea had signed a $700 million agreement with IBM for all its IT infrastructure requirements.
Idea recently awarded a $100 million, four-year contract to Ericsson. Under the contract, Ericsson will supply radio access, microwave transmission and core network equipment, including its mobile softswitch solution, for the Mumbai circle. The deal could be a precursor to Idea getting spectrum from the government to commence services in the circle, where commercial launch is scheduled in May 2008. The company has been waiting for spectrum since it received the licence for Mumbai in 2006.
MTNL
Mahanagar Telephone Nigam Limited (MTNL) awarded a three-year contract to UTStarcom in February 2007 to deploy the latter’s RollingStream end-to-end IPTV solution. The contract marked India’s first commercial IPTV deployment. Earlier, in August 2006, MTNL signed IPTV content delivery network affiliation contracts with Aksh Optifibre and IOL Broadband. Aksh Optifibre uses UTStarcom’s technology for its content delivery network. In all, MTNL selected three franchisees for developing the content delivery platform. Time Broadband Services India was the first to win the contract for both Delhi and Mumbai. It has a seven-year non-exclusive deal with MTNL.
In May 2007, MTNL awarded a contract to Sterlite Technologies for deployment of a broadband and metro Ethernet network in Delhi and Mumbai. The network, once completed, will be capable of handling about 500,000 broadband connections in these cities. The contract is valued at Rs 1.69 billion.
Motorola signed an agreement with MTNL in January 2007 for the supply of a universal mobile telecommunications service cellular network in Delhi and the National Capital Region. According to the agreement, which includes network deployment and maintenance services, Motorola will add 2 million GSM lines to MTNL’s network. In February 2007, MTNL awarded similar network expansion contracts for its Mumbai circle to ITI and Alcatel-Lucent.
Others
In August 2007, Vodafone Essar awarded a near-$1.8 billion network expansion contract jointly to three equipment vendors ?? NSN, Ericsson and Motorola ?? for base stations, transcoders, base station controllers and switching centres.
In February 2007, Aircel awarded a contract to Ericsson for deploying network infrastructure and equipment in 11 new circles. As per the contract, the Swedish company will provide the infrastructure as well as other services for GSM/GPRS/EDGE services, unified messaging systems, MMS and intelligent networks.
In June 2007, NSN won a Rs 3 billion contract from Aircel to build and operate a greenfield GSM network in Kolkata.Nokia will supply GSM/EDGE equipment and managed services, including operation and maintenance services, for Aircel’s network infrastructure.
