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TCS, BSNL Lock Horns Over 4G Hardware Pricing; 4G Launch By BSNL Can Get Impacted

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The deadlock between BSNL and TCS continues as the latter sought a price hike to supply network gear for 6,000 sites for the BSNL 4G rollout.

The stalemate

BSNL hasn’t yet accepted the price TCS offered.

TCS has said that it will not be able to proceed further due to the offer made by BSNL.

A high-level meeting on this issue is expected to be convened soon.

Background

Earlier this month TCS wanted to increase the network equipment supply cost to keep it in line with the increase in component pricing due to supply chain constraints, escalated labour wages, and continued rupee volatility against the US dollar.

On March 31, BSNL released a purchase order of network equipment for as many as 6,000 sites at a cost of Rs 560 crores.

This price is 56% lesser than the price point of phase VIII expansion offered to Nokia in 2018.

Different perspectives

Some accuse BSNL of a conservative approach, reasoning that its actions only discourage vendors, particularly the homegrown ones who have invested in R&D activities.

However in exchange for their services they are offered unviable price points that led to the cancellation of nearly 20 tenders during the last three years.

On the other hand, experts believe that with TCS, being a sole supplier, a fair price discovery and meeting optimum service-level agreement (SLA) and maintaining network quality might be a challenge for the state-run operator in a longer run.

Timeline of developments

Last July, the Tata group company-backed consortium were tasked to test the network within a 120-day timeframe.

From July, the deadline was moved to December 31, and later to January 2022.

In April, Minister of Communications Ashwini Vaishnaw said that BSNL was in final stages to work out the commercials involved in procuring 4G network equipment for 6,000 sites.

Launch

On a shorter scale, the 4G launch is expected in August.

On a big scale, it is likely at the end of this fiscal year.

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