From: myadav@ruhets.rutgers.edu (Mahesh Yadav)
Subject: India - British firm offers 4 lakh lines to DoT as grant
Organization: Rutgers Univ., New Brunswick, N.J.
Date: Mon, 17 Aug 92 12:29:06 GMT

From : Mahesh K. Yadav
Times of India, Business Times (section),Aug,7,1992
Country: india

       	   BRITISH FIRM OFFERS 4 LAKH LINES TO DOT AS GRANT
	   ================================================

The Times of India News Service
By Rajesh Kalra
NEW DELHI, Aug 6:
	Carrots have started flying thick and fast at Sanchar Bhavan, head 
quarters of the deparment of telecommunications (DoT), as competition hots up
among the bidders for India's most coveted telecommunications project, for 
supply of large telephone exchanges.

	GPT of Britain, which had bid along with eight other multinationals 
when the bid for supply of 2 lakh lines of large exchange equipment was opened 
on March 16, has reportedly offered to supply 4 lakh as a grant to the DoT. 
This follows the company's failure to get the nod from the department in spite
of it having quoted the lowest figure of Rs 5,384 per line.

	Its expectations of getting a major chunk of the two lakh lines order 
went up in smoke sometime ago when the DoT went a step better and made counter
offers to three of the bidders -- Siemens, Ericssons and Fujitsu -- that they
could supply a total of 3 lakh lines, but at Rs 5,034 per line, i.e. Rs 350
less than GPT's offer. To GPT's misfortune, all three accepted the offer and 
now, subject to validation, will be supplying 1.1 lakh, 1 lakh and 90,000 lines
respectively.

	However, this offer, apparently, is not the end of this. Highly placed
sources in the DoT say that once this information spreads to other bidder, they
expect them too to "fall in line" and this includes those who have accepted 
the DoT's counter offer.

	Now, the DoT wil have to wait and see when the others "fall in line".
But GPT's move proves at least one thing -- the MNCs will do anything to gain
a foothold in the Indian telecom arena. 

	And why should'nt they? All the MNCs are looking at this as an entry
strategy and not immediately as a business proposition, which is expected to 
follow later. India has one of the most ambitious telecom expansion plans
among the developing countries. From around 5.5 million lines at the moment,
the plans is to have a four-fold increase to 20 million by the turn of the 
century. Naturally, all are eyeing the tremendous potential offered by this 
market, so what if some sacrifice has to be made initially.

	It has been apparent ever since the government gave indications that it
will invite foreign technologies for expansion of the telephone network. The 
government wanted favourable financial offers but none did so initially. After
sometime, however, one MNC offered soft loans and to beat that, another came 
forward to say that to help the foreign exchanged-starved government, it will 
supply equipment on rupee payment.

	At that time, people in the telecom circles used to joke that if the 
government waits for some more time, it may even get equipment free! Today,
it's the department of telecommunications which might be laughing all the way
to bank.

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