In a significant development, Bharat Sanchar Nigam Ltd. (BSNL) has awarded advance purchase orders worth ₹15,700 crore to Tata Consultancy Services (TCS) and ITI Ltd for the deployment of 100,000 4G sites. The long-awaited announcement brings an end to months of speculation, with TCS emerging as the favored candidate for the contract. This collaboration marks a crucial milestone in BSNL’s journey to upgrade its infrastructure and expand its network across the country.
ITI’s Role in Next-Generation Network Deployment
As part of the deal, state-run ITI will play a pivotal role by deploying a fifth of the 4G sites. ITI holds a reservation of 20% in BSNL’s next-generation network deployment, underscoring the government’s commitment to promoting domestic players in the telecom sector. This strategic partnership between ITI and BSNL further strengthens the indigenous telecom manufacturing capabilities of the country.
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Circle-Wise Purchase Orders and Equipment Procurement
BSNL plans to issue circle-wise purchase orders to procure the necessary equipment for the 4G network expansion. The advance purchase orders (APOs) were officially issued on May 19, paving the way for the commencement of the project. This systematic approach ensures a streamlined and efficient implementation process for BSNL’s ambitious network modernization plans.
Closing the Gap with Private Rivals
While BSNL has been a prominent player in fixed line and wireless telephony and data services across India (except Mumbai and New Delhi), its private sector competitors have already established 4G services and even launched 5G offerings in select areas. This collaboration with TCS and ITI signifies BSNL’s commitment to catching up with the rapidly evolving telecom landscape and providing advanced services to its customers.
TCS Consortium and Tejas Networks
TCS, India’s largest software exporter, will lead the consortium responsible for implementing the BSNL 4G project. The consortium includes Tejas Networks, a telecom gear manufacturing company within the Tata Group. Tejas Networks will supply and service the Radio Access Networks (RAN) equipment, further enhancing the domestic telecom manufacturing ecosystem.
Revenue Boost for TCS, Potential Margin Impact
This deal comes at a crucial time for TCS, as its major markets in the United States and Europe are experiencing a slowdown. Being the frontrunner in the BSNL 4G project, TCS stands to benefit from significant revenue growth. However, the involvement of multiple players in the project may potentially impact TCS’s profit margins, as the company shares responsibilities and revenues with other consortium members.
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