BSNL is requiring that only domestically produced equipment be used for the 5G network rollout
Nordic vendors Ericsson and Nokia have reportedly expressed dissatisfaction with the terms of Indian state-run telco BSNL’s recent 5G tender, Indian newspaper Financial Express reported.
The state-owned Indian telecom operator is requiring that only domestically produced equipment be used for the 5G network rollout, a condition that has drawn criticism from the telecom gear suppliers.
The tender is part of BSNL’s plan to launch 5G Standalone (5G SA) services in Delhi, targeting 1,876 sites across the 900 MHz and 3.3 GHz bands. According to the report Ericsson, Nokia, and 27 other local companies, including L&T Technology, TCS, Tejas, VVDN, Lekha, and HFCL, attended a pre-bid meeting hosted by BSNL last week.
The report also noted that despite requests from Ericsson and Nokia to relax the requirement for indigenous technology, government officials are reportedly unwilling to amend the condition, as they are committed to promoting India’s domestic telecom equipment industry. The same requirement applies to BSNL’s ongoing 4G network deployment, the report added.
The report also highlighted that Ericsson and Nokia are facing a slowdown in 5G equipment orders, as Reliance Jio and Bharti Airtel have nearly completed their initial 5G rollouts, leaving Vodafone Idea as the primary remaining opportunity for 5G sales in India.
Domestic vendors have also expressed concerns over BSNL’s revenue-sharing model. The proposed terms allocate at least 70% of revenue to BSNL, leaving a smaller share for selected vendors. They argued that the high initial investment required from bidders makes this arrangement unattractive. Part of that initial cost includes a bid security of INR 5 million ($59,300) for Micro, Small, and Medium Enterprises (MSMEs) and startups, along with a performance bank guarantee of INR 30 million. Vendors have called for the elimination of the bid security and a reduction of the performance guarantee.
In response, they suggested that BSNL’s revenue share should be reduced to 30%, with the revenue-sharing model starting only two years after the 5G service is launched, to allow sufficient time for customer acquisition. Vendors also urged BSNL to remove a clause that allows the termination of contracts if minimum revenue targets are not met for three consecutive years.
The report also stated that BSNL agreed to extend the bid submission deadline to December 16.
According to the tender specifications, BSNL plans to leverage the 900 MHz and 3.3GHz frequency bands to deliver 5G SA connectivity at a number of locations in New Delhi. Selected bidders will be responsible for the planning, design, equipment supply, deployment and ongoing management of the 5G network within the licensed service area (LSA), the reports added.
In New Delhi, BSNL intends to work with two separate service providers: one as the main 5G as a Service (5GaaS) provider and another as a secondary provider. The primary 5GaaS provider will be tasked with establishing one 5G SA core network and a 5G-RAN using hardware from up to two original equipment manufacturers. Similarly, the secondary provider will also install 5G-RAN equipment from a maximum of two OEMs.
BSNL previously noted it started the testing of its 5G indigenous technology at three places in New Delhi: Nehru Place, Chanakyapuri and Minto Road.
BSNL has recently announced its anticipated 5G rollout, with services expected to launch in 2025 following successful network trials.
