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G. Rambabu

NEW DELHI, March 7

THERE seems to be no end to the woes of telecom major Mahanagar Telephone Nigam Ltd (MTNL).

It has been a year since it started cellular services - Dolphin - in the largest telecom markets of Delhi and Mumbai. But while the private operators are raking in subscribers by the droves, MTNL is losing them each passing month. As against its subscriber base of 2.41 lakh, the private operators have a combined base of 30.27 lakh.

To top it now, all its efforts to rectify the situation by procuring a new billing system, identified as one of the major causes for this tardy performance, has been caught in an unsavoury controversy.

According to official sources, the company had taken a decision to replace its existing billing system close to six months ago, as it worked erratically, forcing the existing subscribers to migrate. After months of dithering, the telecom board finally gave its clearance to issue a tender notice in early January.

Only two bids were received from reputed international companies — Sema Software Ltd, a subsidiary of Schlumberger, and CSG Systems Ltd.

While the bid of Sema was rejected in the first stage on technical grounds, the CSG bid was initially approved; but it subsequently ran into problems. To begin with, the bid amount was found to be too high, at over Rs 70 crore, even as the existing system installed by Tata Infotech Ltd (TIL) cost Rs 9.7 crore.

"Detailed negotiations were held on the point whether it would be worthwhile for MTNL to negotiate for lowering their bid, as well as the possibility of opening the bid of Sema.

"After deliberations, it was felt that since in the limited tender, the bid of CSG Systems emerged as a single bidder; no fruitful purpose would be served if negotiations were held with it to bring down the price. On the other hand, the other bidder Sema which is technically and commercially non-compliant cannot be considered for opening of the financial bid", sources said.

It was at this time that the technical evaluation committee found problems with the CSG bid too.

But since MTNL was desperate to replace the existing billing system, the management deliberated on the need to grant certain relaxation on technical specifications.

It was, however, decided that since the deficiencies on technical specifications were important in nature and since both the technical evaluation committee and stores purchase committee had concluded that CSG systems tender is not technically compliant, no relaxation could be granted.

The board finally ruled that "delay in procuring new billing system was viewed as a matter of great concern and the need for having a new billing system without much loss of time was felt. In the circumstances, the board decided that revised specification of the tender may be framed and fresh quotations may be obtained from the aforesaid two bidders so that the new billing system is in place at the earliest".

The wheel had now turned a full circle, even as much precious time had been lost.

It might be many more months before the new billing systems are finally procured, by which time the private operators would have only increased their lead over MTNL, which had been entangled in its own lengthy procurement procedures, the sources noted.

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