BSNL Enters Tougher Terrain Following Government Restriction on Sourcing Chinese Gear

Follow Us

The Department of Telecom (DoT) is likely to restrict Bharat Sanchar Nigam Limited (BSNL) from sourcing telecom gear made by Chinese companies, News18 reports. The development is on the heels of the escalated tension at Ladakh's Galwan valley where the Chinese and the Indian troops are engaged in what is termed as the biggest confrontation since 1967. The publication citing unnamed government sources said that the department has been asked to rework the tender. The state-run BSNL in March issued a tender for the deployment of 4G services across India including Delhi and Mumbai circles.

Chinese Players Dominate Telecom Equipment Space

In early 2020, BSNL issued a similar tender for upgrading its existing 2G and 3G sites to 4G across India excluding Mumbai and Delhi circles. In May, it was reported that BSNL had awarded a contract to Nokia and ZTE for the migration of close to 50,000 sites. However, the development is said to have faced a hurdle in the form of DoT who reportedly did not give a go-ahead.

The reworked tender issued in late March requires the vendors to deal with the planning, engineering, supply, installation, testing, commissioning and annual maintenance of 4G mobile network across India. BSNL highlights that winners of the tender will deal with around 50,000 4G sites across India along with an additional 7,000 4G sites in Mumbai and Delhi circles. BSNL highlights that the earnest money for the tender is Rs 70 crores. As of press time on Thursday, BSNL has listed the tender issued in March to be active but has highlighted that the opening of the tender is postponed to July 15.

It remains to be seen whether BSNL issues a fresh tender or issues a clarification on the existing tender over the involvement of Chinese players. While the latest development could be seen as an opening for Indian players including Tejas, Sterlite and Vihaan Networks Limited (VNL), it’s the global players that are dominant in the telecom equipment market.

According to Dell’Oro Group, a company engaged in telecommunications infrastructure research programs, Huawei, Nokia and Ericsson are the top three telecom equipment suppliers. The company said that Huawei has a revenue share of 28% in the worldwide telecom equipment space while Nokia and Ericsson have a revenue share of 15% and 14% respectively. Additionally, ZTE is said to have an revenue share of 11% while Cisco is said to have an 7% revenue share in the worldwide telecom equipment space.

The dominance of Chinese vendors in the telecom equipment space is also attributed to large 4G and 5G patents that are held by Chinese players which enables them to offer equipment at lower price. Huawei is said to hold 25% of the world’s 4G patents with a similar trend observed in the 5G space.

According to IPlytics, a company that maintains a patent database, Huawei has declared 3,325 5G patents with 2,300 of them filed at a patent office like USPTO. IPlytics said that over 1,300 5G patents have been granted to Huawei as of November 2019. Samsung is said to have declared over 2,800 5G patents but has received over 1,700 grants in the same period. However, none of the Indian firms feature on the IPlytics platform.

Restrictions on BSNL Could be Pricier Affair

While the restrictions on Chinese players could lead to an increase in costs for BSNL, the state-run operator already owes a significant sum of money to several vendors.

In December 2019, it was reported that BSNL owed Rs 1,300 crore to ZTE and Rs 1,200 crore to Nokia. Additionally, American Tower Corporation in its first quarter earnings call in April highlighted that around US$16 million in incremental bad debt was recorded in India “due to slow payments” from several players. Crucially, ATC said that BSNL is also one of the operators who is yet to pay but that the operator “has a long history of paying their bills.”

“So we do expect that when the government funding comes through and that could be impacted because of the COVID-19 situation in India, when that comes through, we do expect that those receivables will be paid through that customer,” Rod Smith, EVP of ATC, said in the earnings calls. “Again, our local teams in India that have a very close relationship with BSNL, they've been through this before. That carrier pays their bills from time to time. They do have to wait for government funding, however.”

It has to be noted that BSNL has issued tenders to upgrade its sites to 4G as part of its revival package announced by the government in 2019.

With BSNL already under debt to several vendors and with numerous contract workers currently protesting due to the operator not paying salaries, BSNL’s survival could be under significant cloud.

Reported By


Born in India, Yogesh loves to travel and has lived in multiple countries including New Zealand and Canada. His bylines can be found on various newspapers and blogs throughout the world, including Vancouver Sun, Surrey Now-Leader, Daily Hive , Investing News Network and Rach F1.

Recent Comments

TheAndroidFreak :

It was better till 2022, in Mumbai. But sites have increased for sure due to 5G. Airtel rural coverage sucks…

Vodafone Idea Struggled to Add 4G Subscribers in FY24

TheAndroidFreak :

Realme all phones support 1+3+8/3+41. Since Realme 9 Pro Plus(Realme GT series as well). No issues whatsoever. Poco F5/Poco F6…

Vodafone Idea Struggled to Add 4G Subscribers in FY24

TheAndroidFreak :

Band 5 doesn't make sense for Jio. After 5G, 4G has improved a little bit. Because Jio 5G is SA…

Vodafone Idea Struggled to Add 4G Subscribers in FY24

TheAndroidFreak :

To be honest they don't need 5G. They need dense band 41 network. They can do it easily with raised…

Vodafone Idea Struggled to Add 4G Subscribers in FY24

TheAndroidFreak :

NSA network style choked their network to the fullest. Their 4G users(mostly postpaid) are getting affected now and have shifted…

Bharti Airtel had 72 Million 5G Users at the End…

Load More
Notify of
oldest most voted
Inline Feedbacks
View all comments