The moves comes after DoT's nominee directors rejected the proposal
Struggling to compete with private telcos in the absence of 4G services, state-run BSNL has approached the government for upgrading its 2G/3G equipment in south and west zones, so that 4G services in these areas can be launched in 3-4 months. The company’s move seeking government’s nod comes after the proposal to upgrade the network was deferred by the government’s nominees on its board at its board meeting on July 23. The government nominee directors have raised concerns regarding security-related issues.
Majority of BSNL’s network has been rolled out by two vendors — Nokia and ZTE. But since ZTE is a Chinese company and has not registered with the competent authority, BSNL can’t place an order on it for any upgradation. BSNL being a state-run firm has to follow the revised General Financial Rules (GFR), which bar Chinese firms’ participation in public tenders, unless registered with the competent authority. But an order can be placed on Nokia for upgrading 13,533 sites in south and west zones, which will cost Rs 567.35 crore.
The telco has also secured a one-time exemption from National Security Council Secretariat (NSCS) for upgradation of 2G/3G sites to 4G by Nokia. The approval from the government is crucial for BSNL’s survival as its pan-India 4G network by domestic firms can’t be rolled out before 18-20 months in the best case scenario. The rollout maybe delayed further if the trials by the domestic firms can’t be completed by October this year.
Facing a grim situation, BSNL CMD PK Purwar has written to telecom secretary Anshu Prakash requesting him to provide suitable guidance to the government directors on its board to give their consent to the upgradation proposal st the company’s next board meeting, that is likely to be held later this month.
“This is the most cost-effective way of 4G services expansion and will save hundreds of crores of capex. The entire exercise of upgradation can be completed within a shortest time-frame of 3-4 months without disturbance to the existing network and services,” Purwar said in the letter, a copy of which has been seen by Financial Express.
It must be mentioned that BSNL has been mandated by the government to utilise ‘domestic core or Indian core’ in its network for expanding 4G services. Accordingly, BSNL floated a tender for procurement of 50,000 sites with local core and letter of intent has already been issued to five vendors including TCS, Tech Mahindra, HFCL, L&T and ITI. The trials for testing the domestic core are under progress.
But as rolling out network with domestic core will take a minimum of 18-20 months, the company wants to upgrade its sites in south and west zones, so that 4G services can be launched at the earliest.
“The proposed upgradation is sporadic in nature and that too limited to south and west zones. South zone of BSNL alone is contributing about 40% to the revenue generated from mobile services,” Purwar said.
The CMD further said in the era of data services, BSNL mobile subscribers are facing bandwidth issues which has resulted in huge churn of subscribers due to non-availability of 4G services. “In case upgradation to 4G does not happen, it will cause severe and irreparable loss to BSNL’s customer base permanently,” the letter said.
As part of the revival plan, BSNL has been, in principle, allocated 5 MHz additional spectrum to launch 4G services on pan-India basis but due to lack of equipment, BSNL could not proceed beyond the 4G spectrum allotment.