Motorola withdraws BSNL case Fnally, BSNL can go ahead with its much-delayed $4.8 billion expansion plan. US telecom equipment maker, Motorola, which had earlier taken BSNL to court, challenging its disqualification in the 45.5 million line tender process, has now withdrawn the case.
According to a statement issued by Motorola, “In view of the tremendous growth taking place in the telecom sector in the country and BSNL’s petition of capacity constraints stifling its expansion, Motorola has decided to withdraw its case from the Delhi High Court.
Explaining the change of heart, Motorola officials said that though the company had complied with all the tender conditions, it did not want to inconvenience a valued customer like BSNL with which it hoped to have a continuous partnership in the future.
For BSNL, this is a major hurdle removed. With a delay of several months, the PSU had been hard-pressed to cope with constrained capacity on its networks.In fact, its subscriber additions in some circles were beginning to take a hit, as the operator had exhausted its capacity.
The path has now been cleared for the lowest bidders ?? Germany’s Ericsson AG and Finland’s Nokia ?? to share the contract in a 60:40 ratio.
Further, BSNL is placing advance procurement orders with Ericsson and Nokia with the hope of completing Phase I of the expansion plan by end-2007.
Meanwhile, BSNL officials feel the company may have to scale up the tender to match the robust growth taking place in the Indian mobile segment. The company is looking at increasing the tender size by 50 per cent, and possibly even 100 per cent, once the initial orders have been placed.
All in all, this is a good move for both sides. Motorola can now focus on growing its presence in India without being tangled in legal proceedings. And BSNL can look to drive growth in the mobile segment.
