Local reports are suggesting that Ericsson could win the entire GSM network tender from India's BSNL as Nokia Siemens Networks (NSN) has not yet formally agreed to the terms from the company. The company had planned to split the 22.75 million GSM lines contract 60:40 between Ericsson and NSN. Ericsson's current allocation is worth around US$1.3 billion while NSN's is worth around US$954 million.
Nokia Siemens did originally tender at a higher cost than Ericsson, hence the smaller share of the tender - but is required to match Ericsson's price if it wants to take up the contract.
An unnamed BSNL executive told The Economic Times that if NSN failed to pick up the purchase orders within the next couple of days, another option would be to float a fresh tender.
When asked if BSNL would award the entire contract to Ericsson, BSNL chairman and managing director Kuldeep Goyal told the newspaper "I hope they (NSN) come around. However, if they do not agree, then we will have to explore other options".
BSNL's tender has been mired in controversy ever since it was sent for RFP last year. Initially the tender was for a massive 45 million lines, but the government blocked this and it was shrunk to just under 23 million lines. Then arguments with Motorola who claimed to have bid lower than Ericsson for the tender, but was disqualified from competing on technical grounds.
Under the terms of the final award, Ericsson bid the lowest figure - reported to be about US$91 per line. Nokia - prior to the infrastructure merger with Siemens had bid around US$177, with a significantly higher figure reported from Siemens. The merged company may be having difficulty in pulling down its costs to the level offered by Ericsson.