Telecom Lead India: The proposed telecom PSU alliance under the aegis of telecom secretary R Chandrasekhar has the potential to avoid participation of foreign and private telecommunication vendors from bidding for BSNL and MTNL projects.
According to a report in Economic Times, the aim of the master alliance is to create a telecoms ecosystem at the PSU level, where C-DoT will handle product development, ITI will be systems integrator and handle production of telecom gear, which, in turn, will be bought by BSNL and MTNL.
If BSNL and MTNL start buying telecom gear from ITI alone, vendors such as Ericsson, Nokia Siemens, Huawei, ZTE, Cisco, Alcatel-Lucent, NEC and Samsung will face difficulties in Indian mobile market.
There is already a move to buy locally made telecom equipments. The current move will add fuel to viability of the business, analysts said.
The positive aspect of the development is to strengthen the security of telecom networks without relying on foreign players' infrastructure.
The industry is already facing ARPU pressure due to non-viability of the telecom sector worsened by regulatory issues and economy challenges. The state-run ITI is not known for quality products. In the last 10-15 years,foreign equipment players contributed significantly for the growth of Indian telecom.
A high-powered panel will unveil a roadmap for setting up a master alliance between service providers BSNL and MTNL, research body C-DoT, gear maker ITI and Telecommunication Consultants of India (TCIL) to unlock operational synergies across these telecom PSUs.
The report said the panel will define the role of each telecom PSU member in the proposed alliance, iron out potential conflicts of interest and formulate an asset sharing and product procurement model to optimize central sector resources.
The panel will monitor implementation of various initiatives to be undertaken by each alliance member in a time-bound manner. It will address issues relating to role clarity, constraints and potential conflict zones triggered by the formation of such an alliance of telecom PSUs.
The Telecom Commission, the apex policy-making wing in the Department of Telecom (DoT), has endorsed the need to explore synergies between loss-making state-run telecom units to form a strong organization to withstand competition from private sector rivals.