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Monday, July 21, 2008

TeleTalk Tk 573cr Expansion Project Starts

State-run mobile operator TeleTalk finally gave the go-ahead for its much-talked-about Tk 573 crore network expansion project as the company last week awarded two of its existing vendors the first phase of the scheme.

According to the decision of the company's board meeting, the Tk273crore first phase work went to European Nokia-Seimens Network and Chinese Huawei.

The board in principle also decided to go for open tender process for awarding the second phase of the project, which is aimed to reach 1.8 million new customers by 2009.

"After a long verifying process of checking whether the claimed price for the work is rational or not, we have approved the project at our last board meeting," said Iqbal Mahmud, chairman of the TeleTalk board yesterday.

Plans to strengthen TeleTalk were first discussed more than two years ago with the operator finally approving the Tk573 crore network expansion project in February this year.

Soon after this, the company's board changed and several members of the new board expressed concerns over the budget allocated for the expansion project.

In February, the company's board decided that the company's existing vendors -- Huawei and Nokia-Seimens should do the initial network expansion works of Tk273 crore. The rest of the work was to be awarded through an open bidding process.

However, the board's decision to let company's existing vendors do the work soon ran into controversy as telecom industry experts began to question the allegedly high cost estimates by the TeleTalk board. Some rival vendors also alleged that the mobile operator bypassed the Purchase and Procurement Regulation (PPR) by awarding the mega project to these vendors.

A scrutiny committee has already examined the network expansion project.

The TeleTalk board chairman said, "We have maintained all legal procedures as far as the network expansion project goes. Whatever we do we do for TeleTalk's development and also for welfare of the nation."

He said TeleTalk is not bound to follow PPR, adding that the company does not use government fund and has its own purchase policy, under which it maintains all purchase as per the company law.

TeleTalk is the country's smallest operator in terms of subscribers with around 2.31 per cent market share. It started operations in 2005 with high hopes, but failed to compete with the five other multinational operators due to lack of quality services and poor marketing strategy.

Till June 2008, the company has been able to add only 1.07million customers in two years since its entry into the market.

The five-year long TeleTalk's mega project styled Strategic Expansion Plan was initially discuss in 2006. The Nokia-Seimens and Huawei will go for core network expansion works of the project.

According to the company's final approval Nokia-Seimens and Huawei will engage to expand its earlier network sites. Under this initial phase, Nokia-Seimens and Huawei will undertake work worth Tk184crore and Tk90crore, respectively.

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