NEW DELHI – Ericsson, the world’s biggest maker of wireless networks, and Nokia will split most of a $5 billion contract to supply gear in India after Motorola dropped its legal challenge to the award.
Ericsson will supply 60 percent of the equipment for 45.5 million lines to the state-run Bharat Sanchar Nigam, with Nokia providing 40 percent, D.P. Singh, director general at the Indian telecommunications company, said in New Delhi.
The state-controlled ITI will supply equipment for 18 million lines.
India’s wireless operators, including Bharti Airtel and Reliance Communications, will spend about 40 percent of their $20 billion of capital expenditures in the next two fiscal years on equipment, said an analyst, Shubam Majumder. Motorola, based in Schaumburg, Illinois, said it withdrew its petition before a New Delhi court to focus on winning new contracts.
“India is adding more subscribers than any other country,” Majumder, an analyst at Macquarie Securities, said in an interview from Mumbai. “It’s by far the biggest market for 2G equipment vendors worldwide.”
India, where fewer than one in five people have a mobile phone, is the world’s fastest-growing wireless market. With a population of 1.1 billion, India is adding almost 7 million subscribers a month as local mobile-call rates fall to as low as 2 U.S. cents a minute.
Ericsson had submitted the lowest bid, P. Balaji, vice president of marketing for the Swedish company’s Indian unit, said on Oct. 9 after Bharat Sanchar said it was eliminating Motorola and ZTE of China on grounds that they failed to meet technical qualifications.
“We are almost ready with the paperwork and can place the order in a maximum of two weeks to the two short-listed bidders,” S.D. Saxena, director of finance at Bharat Sanchar, said by telephone from New Delhi. “We are desperate for new equipment and it will help in expanding our telecom services in rural areas.
“In view of the tremendous telecom growth taking place in the country and Bharat Sanchar’s petition of capacity constraints to have its share in this expansion, Motorola has decided to withdraw the case filed in the Delhi High Court,” Motorola said in an e-mailed statement Monday.
The size of Bharat Sanchar’s order will pale in comparison with those awarded by Bharti and Reliance Communications, India’s two largest wireless operators, in the next few years, Majumder said. Bharat Sanchar is crippled by the government-managed bidding process, unlike the private operators, he said.
Fuente: International Herald Tribune