Brief

BSNL awards $500 million contract to Nortel

Bharat Sanchar Nigam (BSNL) has awarded Nortel a contract estimated at approximately $500 million to expand BSNL’s GSM/GPRS digital wireless network in the East and South zones of India. This expansion, part of a larger nationwide project, is expected to be completed in the first half of 2005.

Under the agreement, Nortel will deploy an end-to-end GSM (Global System for Mobile Communications) and GPRS (General Packet Radio Service) solution including GSM radio base stations, mobile switching centres (MSCs), intelligent networks (IN) and other related equipment–to provide wireless voice and data services with carrier-grade network reliability.

“This contract further establishes Nortel as a significant wireless player in the Indian market, in addition to its position in the optical and enterprise segments,” said John Giamatteo, president, Asia Pacific, Nortel. “This award and the strategic footprint will position us extremely well to capitalise on India’s significant future growth for our long-term benefit.”

India is among the fastest growing telecommunications markets in the world. Teledensity now stands at approximately eight percent, or more than 86 million people with telephones. This figure is expected to grow to 15 percent by 2010, according to Telecom Regulatory Authority of India (TRAI).

“Nortel’s wireless technology is expected to play an important role in helping us achieve our objective of becoming the leading telecommunications company in India and our vision of bringing advanced communications services to millions across the country,” said A K Sinha, chairman and managing director, BSNL. This contract is an important strategic investment for BSNL that provides a significant footprint in India. Commitments to date against the contract represent the majority of the investment and are expected to result in a $0.03 per share cost impact to Nortel’s third quarter in 2004. Nortel has designed, installed and launched more than 300 wireless networks in more than 50 countries worldwide.