Former top officials of the department of telecommunications (DoT) and Bharat Sanchar Nigam (BSNL) have expressed concerns over the government’s stance that the core 4G network of BSNL should be built by domestic vendors and not global firms like Ericsson or Nokia. So far domestic vendors have not commissioned the core network of any telecom operator in the country. Such an experiment in the case of BSNL when it’s venturing into 4G services almost three-four years late compared with its private-sector peers, will not only escalate costs for the company but also competitively put it at a huge disadvantage.
The officials told FE that giving preference to local companies should be promoted but it should happen
in
a phased manner for all the telecom companies, not just BSNL. An
empowered technology group (ETG) is scheduled to take a decision around
BSNL’s 4G tender later this week.
Former DoT secretary R Chandrashekhar said: “If we want BSNL to function in a competitive environment, it should not be subjected to conditions that are not applicable to private telecom operators. If the conditions are because of security concerns, like use of Chinese equipment, it should be mandated for everybody, including private telcos. Similarly, any mandate regarding use of only Indian equipment for core networks should be for all operators and not just BSNL.”
He, however, said currently India is probably not in a position to meet all its telecom network equipment requirements indigenously as there is lack of end-to-end manufacturing capacity within the country. “Besides, we have to reach a stage where Indian companies are able to manufacture at a global scale at globally competitive prices. If BSNL is expected to provide a secure network to government using only equipment made by Indian companies, it should be paid for that and the project kept distinct from its normal commercial operations,” Chandrashekhar added.
Another DoT secretary on condition of anonymity said the mandatory use of local core equipment should have happened in a phased manner and not suddenly. “At a time when BSNL is at a critical stage, they are trying to cut the corner which will hurt the company. Meanwhile, the company should be allowed to buy from reliable sources from friendly countries, and in future, when the capabilities are there domestically, BSNL should buy from local companies,” the official said.
BSNL, too, has put forth its concerns around using local equipment for 4G network before a DoT-appointed technical committee as well as NITI Aayog, but so far the issues raised by it have not been accepted. The telco has already stated that equipment made by local firms is expensive as well as sub-standard. In a recent letter to DoT, BSNL has said in some instances, local equipment is 88% expensive compared with global suppliers.
“Indian core network has not been tried so far and already there has been a delay in rolling out 4G services. It will lead to financial loss to the company for which the government should give adequate compensation to it,” RK Upadhyay, former CMD of BSNL, told FE.
Another former CMD AK Sinha said BSNL has always faced such issues where the company was mandated to reserve a portion of its tender for local and PSU firms like ITI. “How can you compete in the market when you are not able to offer the latest product at a competitive price. No amount of compensation can fulfil the loss,” another top BSNL official said.
