Delayed 4G tender: BSNL seeks compensation from govt for revenue loss

By: |
November 03, 2020 7:00 AM

Fears further loss due to govt not allowing upgradation of 2G network

Why else would a PSU be asked to delay its capex plans and to tailor them to government specifications?An empowered technology group (ETG) is scheduled to take a decision around BSNL’s 4G tender later this week.

State-run BSNL has written to the government that it should be fairly compensated for the losses that will accrue to it due to delays in rolling out 4G services, non-upgradation of about 36,000 radio equipment of Chinese vendor ZTE and deterioration of 2G services on account of non-procurement of 2G equipment, among others.

Although it’s been a year since the government approved a Rs 70,000-crore revival package for the ailing BSNL and MTNL, the former is still struggling to put in place a tender to place orders for building its 4G network. Even as the 4G tender is getting delayed, a government-appointed committee is not allowing it to procure new 2G equipment on the pretext that 2G users should be migrated to 4G.

BSNL’s apprehension is that as a result of such delays it might fail to meet the targets of revenue and profitability fixed at the time of the revival package. BSNL’s revenues have declined by 45% in four years from FY16 to FY20 and the revival package has targeted them to rise 90% from `18,000 crore in FY20 to `34,270 crore in FY24.

The company has informed the department of telecommunications that delay in roll out of services on account of delayed implementation of deferred features, 4G only core, poor inter-working and lower quality of services because of unproven equipment will lead to loss of business opportunity and loss of market share.

“Deterioration of 2G services on account on non-procurement of 2G equipment for replacement will severally impact revenue and market share of BSNL,” the company has written.

The company is expected to prepare a revised tender for 4G after receiving clarifications on these issues from DoT.

BSNL has expressed reservations around the proof of concept (showcasing of products and conducting trials) on 4G network by domestic companies as it will not be possible to check each and every feature of the equipment in a short time period of four months, which includes the time required by vendor for installation and commissioning of the equipment.

“Further, in case PoC is not completed within the time period or failed due to technical non-compliance, the 4G roll-out plan of BSNL will further get delayed,” the company has written, adding that it does not have spare spectrum to carry out PoC. “Accordingly, DoT needs to allot spectrum in suitable band free of cost for carrying out PoC,” BSNL has pointed out.

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