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Bharat Sanchar Nigam Ltd (BSNL) Cell One, India




Key Data


Bharat Sanchar Nigam Ltd (BSNL) is one of the largest telecommunications companies in India covering both mobile communications and fixed infrastructure. The company was formed in October 2000 when the Indian Government Department of Telecom Operations was floated as a company. The success of the company shows in that it has over 38 million fixed line subscribers, 6.9 million GSM / GPRS subscribers and 1 million CDMA subscribers.

The company's Cell One network (GSM/GPRS) was launched in late 2002 and within six months had attracted 2.4 million subscribers. BSNL then decided to halt further network capacity expansion, as it believed it could not sustain the rate of growth. Subscriber numbers did not fall off, but neither did they increase at the same rate.

The BSNL board later realised its mistake and in November 2003 authorised capacity enhancement for their cash cow Cell One network (the company has also been affected by SIM card and GSM handset shortages). The expansion process is currently ongoing, increasing the capacity to accept 15 million more subscribers. The network expansion includes the biggest ever GSM tender for 11 million lines, worth $863 million (although the total investment may eventually reach $2.18 billion). This is scheduled to be in place by March 2005, giving BSNL capacity for 31.25 million subscribers. The company target is to reach a total of 25 million GSM subscribers (21.46% of the mobile market in India) by December 2005 from just 6.9 million subscribers in November 2004. BSNL has three major rivals in Bharti, Reliance Infocomm and Hutchinson.

BSNL COVERAGE EXPANSION

Along with the GSM push, BSNL is also planning to extend into inaccessible areas with static CDMA handsets / terminals. BSNL has sought expression of interest (EOI) for joint ventures with major global companies to design and develop a range of CDMA mobile and fixed wireless terminal (FWT) handsets. To aid this, it plans to lease out space in its manufacturing facilities, which make microwave towers and telephone polls, at Mumbai, Kolkata and Jabalpur to the prospective handset manufacturers. The plan is to make about a million each of CDMA handsets and FWTs.

By March 2005 the company's mobile services will cover over 4,500 towns, as opposed to its current presence in 1,600 towns. Jammu and Kashmir will get special preference in this expansion scheme with 300,000 lines being added to meet the demand.

The BSNL expansion plans are not without competition. Reliance Infocomm's second phase of expansion will cover 4.7 million villages, and Bharti is about to roll-out new services in seven circles across the country. All the networks are being monitored by the Telecom Regulatory Authority of India (TRAI).

CONTRACTORS

In December 2004 Nortel Networks was awarded a contract to deploy a GSM / GPRS end-to-end network worth $500 million across the country. The Nortel network will include GSM radio base stations, mobile switching centres, intelligent networks (IN) and other related equipment to provide wireless voice and data services.

A previous contract awarded to Nortel Networks in August 2004 was an expansion for the Southern and Eastern region.

Lucent Technologies was also awarded a contract earlier in 2004 to supply its 5ESS switching systems, with a capacity of 1.5 million lines, to BSNL as part of the renewed expansion program. The switching systems were manufactured by Lucent's facility in Bangalore. The 5ESS switch is a multi-service, software-based, packet-ready switching system. Lucent is also responsible for the supply of CDMA-based wireless equipment to BSNL to facilitate the telephone service in rural areas.

NORTEL NETWORKS EQUIPMENT

The Nortel equipment to be supplied to BSNL for their end-to-end network solution will include the GSM Circuit Core, which includes the XA-Core-based DMS-MSC (Mobile Switching Centre) and Home Location Register (HLR) that allows a clear evolution path to packet switching. In addition, the equipment will include the GSM Packet Core with a GSM Serving GPRS Support Node (SGSN), Gateway GPRS Serving Node (GGSN), and signalling gateway. These platforms route and validate packet data reliably, efficiently and securely. Nortel Networks will also provide their Base Transceiver Stations (BTS) and Base Station Controllers (BSC).

PREVIOUS CONTRACTS FOR THE CELL ONE NETWORK

The Cell One network, launched in 2002, was based on Ericsson technology in the North and East zones to cover 850 towns and cities. Lucent Technology was also responsible for the supply of switches, operator services and a network management system.

As the government-owned operator BSNL had a major advantage over the other three operators because their license terms insisted that all private operators had to route their calls through BSNL exchanges only, thereby incurring a charge. BSNL does not have to pay such charges for its own cellular service. The private sector disputed the interconnect charges demanded by BSNL and has approached the government to change the license terms allowing them to route their cellular-to-cellular calls directly, rather than through the BSNL network.