ITI eyes telecom equipment JVs

State firm in talks with Huawei, ZTE after govt writes off Rs 2,820 cr in losses

Indian Telephone Industries (ITI) Ltd, the state-owned telecom equipment manufacturer, is talking to foreign firms such as Huawei and ZTE for joint ventures in manufacturing advanced telecom equipment, sources said.

The loss-making public sector unit will float a tender inviting quotations from telecom equipment manufacturers within a month.

ITI is seeking partnerships in three new product categories —Wireless Interoperability for Microwave Access (WiMAX) equipment, optical transmission and switching equipment, and IP core network systems.

The central government's Cabinet Committee on Economic Affairs (CCEA) has proposed on February 23 the revival of ITI, which supplies equipment to telecom firms such as BSNL and MTNL. As part of the proposal, the company's losses of Rs 2,820 crore will be written off.

The government's approval has also paved the way for the ITI to form joint ventures with other firms for manufacturing advanced telecom equipment that are required by telecom firms to provide 3G and WiMAX services. Both BSNL and MTNL have already rolled out third generation telecom services. ITI has an existing partnership with telecom equipment manufacturer Alcatel. However, officials at both ITI and its client firms like BSNL, which did not wish to be named, said equipment from Alcatel have become obsolete.

The revival proposal, however, did not mention any development on ITI's July presentation to the Department of Telecommunications for merger with BSNL.

ITI has manufacturing units in Rae Bareli, Naini and Bangalore and makes equipment such as base trans-receiver stations, roof top towers for both Code division multiple access and Global System for Mobile communication platforms.

The 60-year-old government firm had an order book of Rs 8,900 crore in 2008 with the mobile segment contributing Rs 6,000 crore. The firm employs 12,745 people.

Amit Tripathi/ DNA-Daily News & Analysis Source: 3D Syndication