Reliance, BSNL and GTL Infra as lowest bidder for telco infrastructure

Reliance Infrastructure, BSNL and GTL Infrastructure have emerged as the lowest bidders for setting up passive cellular infrastructure in over two lakh villages with support from the Universal Services Obligation (USO) Fund. At the end of the first round of bidding held on Wednesday by the Department of Telecom (DoT), the three companies had quoted the lowest amounts in 80 per cent of the 81 pre-determined districts.

The winner of the project, which will be decided after a multi-stage bidding process, could get as much as Rs 400 crore annually for a five-year period from the USO fund for setting up 7,871 passive cell cites, including towers. The DoT got response from 21 companies for the project, of which a few like HFCL dropped out at the last minute.

Mobile service

It also received aggressive bidding from cellular operators such as Hutch, Aircel and Idea Cellular for providing the actual mobile service using the passive infrastructure. Bharti and Tata Teleservices have been knocked out of the race.

The operators who qualified submitted bids quoting zero amount for the project in the first round of bids, which were also opened on Wednesday. This means that they have not sought any financial support from the USO fund for providing the services.

The DoT had provided for Rs 1.5 lakh-2.5 lakh annually for five years for each of the pre-determined 7,871 cell cites across 81 districts. The aggressive bids will save the Government nearly Rs 200 crore a year. But the qualification will allow these operators to locate their equipment on the infrastructure that will be set up with support from USO Fund.

Bids were invited in two parts. The first part is for setting up passive infrastructure like towers and civil construction. The second part of the bid, open only to licensed service providers, is for offering the actual mobile services to rural consumers.

Both the parts were supposed to be multi-stage bidding process; but with operators quoting zero amount, there may not be another round for the second category. However, the DoT may have to undertake elimination round because only three operators per district have been envisaged by the bid document. The bidders for the passive infrastructure, however, will have to go through another round of financial bidding.