TCS seeks price revision to deploy 4G gear for state-run telco

NEW DELHI: India’s largest IT services provider () has sought a hike in prices for the network gear it has to supply to Bharat Sanchar Nigam Ltd (BSNL) for some of its 6,000 sites as part of the state-run telco’s 4G roll out plans.

But BSNL is yet to agree to the price sought by TCS, leading to a deadlock that has stalled work on the project.

However, the two companies are working towards a limited inaugural launch of BSNL’s next generation commercial network by Prime Minister Narendra Modi on August 15.

“BSNL is yet to accept the price offered by TCS, and a high-level meeting on the issue is expected to be convened soon,” a person privy to the matter told ET. The person added that TCS has expressed its inability to proceed further basis pricing offer made by BSNL.

Queries to TCS and BSNL did not elicit any response.

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On March 31, BSNL released a purchase order to procure network equipment for 6,000 sites at a cost of Rs 560 crore, which according to sources, was 56% lesser than the price point of phase VIII expansion offered to Finnish multinational Nokia in 2018.

Earlier this month, TCS approached BSNL and sought a hike in the network equipment supply prices in line with the increase in component pricing due to supply chain constraints, escalated labour wages, and continued rupee volatility against the US dollar.

But despite disagreements over pricing, TCS had conducted a final trial in Jaipur using 850 MHz frequency band on Monday and is readying for a “limited launch” of BSNL’s 5G services for August 15, the person said.

Industry executives said BSNL’s approach discourages vendors, particularly homegrown companies who have invested in R&D activities but are offered unviable price points that have led to the cancellation of nearly 20 tenders during the last three years.

In January last year, BSNL had released a detailed notice inviting e-tender for planning, testing, deployment and annual maintenance of its much-awaited 4G network across four operational zones in addition to Delhi and Mumbai circles for 57,000 sites on a turnkey basis, and sought proof of concept for Indian companies and consortiums willing to participate in its upcoming 4G tender, in order to test their network quality.

The public sector telco is also planning to procure network gear for another 50,000 sites, and is expecting its revenue to rise by almost 20% after a full-fledged next generation services foray in 2023-24.

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