Four Global Telecom Gear Makers Including Alcatel Lucent SA Opt Out of BSNL Network Contract-DJ

Dow Jones reported that four telecommunication gear makers short-listed by Bharat Sanchar Nigam Ltd. (BSNL) for an equipment supply contract worth more than $1 billion have pulled out saying the final bid price is very low and isn't viable for them. The state-run Indian telecommunications company had invited bids in July 2011 for equipment that will allow it to add 14.37 million mobile-phone connections, as network constraints limit its ability to expand. BSNL had estimated the contract value to be about INR60 billion ($1.07 billion). In February, BSNL selected China's ZTE Corp as the lowest bidder at about $58.6 per user, or $842.08 million for the entire contract. It had also short-listed Huawei Technologies, Alcatel Lucent SA, Sweden's Telefon AB L M Ericsson , and Nokia Oyj and Siemens AG's Nokia Siemens Networks for some parts of the contract. Some of these companies had bid for the physical infrastructure part of the contract, and others for technology. BSNL had said in February it was evaluating the best combination of prices before finalizing the suppliers. In keeping with bidding rules, Huawei, Alcatel-Lucent, Ericsson, Nokia Siemens will have to supply equipment at the price quoted by ZTE. But all four have told BSNL that they won't be able to match ZTE's bid as their margins on the contracts are at risk.