Huawei set to bag $1-bn RCOM contract

KOLKATA: It’s not official yet. But Chinese telecom equipment vendor Huawei has emerged the frontline contender to bag a $1-billion (Rs 4,300 crore approximately) mobile equipment contract from Anil Ambani-controlled Reliance Communications Limited (RCOM).

The $1-billion worth of GSM/CDMA network equipment will be procured by RCOM to install an additional 30 million mobile lines in some 8,000 cities/towns across the country.

To set up an additional 30 million-odd lines, RCOM’s cost per line is likely to work out at roughly $34 (Rs 1462). But the precise cost per line will hinge on the final break-up of new CDMA/GSM lines that the company adds based on the future GSM spectrum availability scenario.

Details of RCOM’s $1-billion mega network expansion contract remain under wraps at this point. But information trickling in suggests that China’s Huawei has emerged at the L1 bidder ahead of competing bidders like Ericsson and Nortel. ET had send an email to RCOM to confirm whether China’s Huawei was slated to bag the mega network expansion contract. It had also sought the details of the $1 billion tender.

In a written response, a Reliance Communications spokesperson said: We are in talks with leading equipment vendors for our network expansion plans and are evaluating various options. A final decision is expected in two weeks.”
Sources close to the R-ADAG top-brass said “We cannot share exact details on the number of digital exchange lines (DELs) that will be added to the RCOM networks. But it will be a mix of both GSM and CDMA network equipment that will be provided by the vendor.”

Such mobile network equipment will, typically, include the gamut of active electronics for DELs from service support nodes, gateway support nodes, media gateways, MSC servers, PSDN access systems, and home location register (HLR) systems.

Incidentally, RCOM’s $1-billion mobile network expansion exercise will be part of the $2.5 billion (Rs 11,000 crore) capex plans that were announced by Reliance-ADAG chairman Anil Ambani in January 2007. The funds will be invested to ramp up network expansion that will touch all towns with a population of 1,000 people by end-2007-08.