Editorial – September 2015

The Prime Minister has berated the operators on the issue of call drops. He has said consumer irritation on this front could become a curse for the government. Speaking soon after to the media, the Telecom Minister said, ‘companies need to invest to reinforce their infrastructure,’ and such other points. A fantastic statement but let us see the record of MTNL in this regard, a company under his watch.

Most thought the high tide of Modi model of governance would bring in efficiencies in public sector companies, the PM himself is keen on revival of the state telcos, and has done assessment meetings. But such a review has not deterred the corrupt practices of those running MTNL. The MTNL GSM order, which has fallen prey to these corrupt practices, is the subject matter of our cover story. MTNL needs equipment if it has to stay alive and it needs it urgently. Tenders for GSM projects in Delhi & Mumbai were invited in March 2012. After 21 months of evaluation, Nokia was shortlisted through competitive bidding since it was the L1 bidder. Under this project 3,526 mobile tower sites for 2G & 3G were to be installed. Negotiations happened, Nokia reduced the prices further by Rs 56 cr. Then, it had to wait for nearly a year for getting the APO. The total order value is to the tune of Rs 1,139 crore.

Once a company gets the APO, it ties up delivery schedules of equipment and components, makes advances because conversion to PO is a routine process. In this particular instance, a post-APO security non-compliance has been blamed on Nokia by the telecom minister in a statement to the Parliament. He has also said there is no delay. This statement at best is facile. If indeed, there had been non-compliance, Nokia’s bid ought to have been rejected at the technical evaluation stage itself. There was some going back and forth on issues of liability in case of security breach. Nokia wanted a linkage of liability, limited to the project value (usual clause for most companies), finally it conceded on this point also after the minister’s statement in Parliament. Thereafter, NK Yadav (Member Services), who also holds the charge as CMD MTNL, moved a note saying that MTNL has no money, MTNL’s market share is just 5 pc, its network is poor & hence no rollout is to be done.

Meanwhile Nokia officials are approached with facilitation offers; a standard practice that follows delays in government procurement orders. PM Modi had said in his I-Day address to the country, that to rid the termite of corruption, an injection is required per sq foot. MTNL is well deserving of that injection.