BharatNet: L1 Bidders Out for 18,377 Cr. of Orders, STL Wins 1,625 Cr. Package
Himachal Futuristic Communications Ltd. (HFCL), Polycab India Ltd. (PIL) & ITI Ltd. have emerged as the lowest bidders (L1 bidders) for the execution of various packages under BharatNet phase-3 project which collectively amount to over Rs. 18,308 crore. Moreover, a consortium led by Sterlite Technologies Ltd. (STL) has secured an order for works worth Rs. 1,625.36 crore under BharatNet phase-3.
These bids are in response to Bharat Sanchar Nigam Ltd.’s (BSNL) tenders for BharatNet Phase-3 which were issued in February 2024.
BharatNet Phase-3 ‘Middle Mile Network’ Works to be Executed
BSNL’s tenders for which HFCL, Polycab India, and ITI Ltd. have emerged as respective L1 bidders pertain to works on ‘middle mile network’ for BharatNet phase-3. Order secured by the aforementioned STL-led consortium also concerns works on middle mile network for BharatNet phase-3.
Middle mile network refers to the connection between the ‘last mile’ or local networks to which end-users are connected, and the greater internet infrastructure. Therefore, middle mile network does not directly connect to the end-user.
The aforementioned tenders are to be executed under Design Build Operate and Maintain (DBOM) Model, with a specified 3-year construction period and a 10-year maintenance period. Value of the O&M orders to be awarded for these packages are to be executed at annual rate of 5.5% of the company’s CapEx for the first 5 years post commissioning, and at 6.5% of the CapEx annually for the rest of the years out of the 10-year O&M period. It must be noted that value of these O&M works is in addition to the mentioned value of the respective contracts.
HFCL & Consortium Partners L1 Bidders for 8,100 Cr. of BharatNet Packages
HFCL mentioned in a stock filing dated 11th November 2024 that it has emerged as the lowest bidder (in consortium and independently for different BharatNet packages) for works worth over Rs. 8,100 crore under BharatNet phase-3 project.
In a consortium with Rail Vikas Nigam Ltd. (RVNL) and Aerial Telecom Solutions Private Ltd., HFCL is the L1 bidder for developing middle mile networks in Uttar Pradesh West and UP East. These works are estimated to cost about Rs. 6,925 crore.
Apart from this, HFCL (standalone) has also secured its position as the lowest bidder for works under BharatNet phase-3 in Punjab, which are estimated to be executed at a cost of Rs. 1,244 crore.
Mr. Mahendra Nahata, MD of HFCL, commented, “HFCL is well placed with a diverse product line that includes routers, optical fiber cables, fiber connectivity solutions, transport solutions, power management solutions etc., to address the needs of the BharatNet Phase III program. As a trusted BSNL partner, we look forward to continued collaborations and contributing significantly to the success of BharatNet Phase-III program”.
Polycab L1 Bidder for 5,649 Cr. worth of Orders
Polycab is the lowest bidder for two BharatNet phase-3 packages, namely packages 4 and 7 which collectively are to be executed at a total cost of Rs. 5,649.36 crore.
While package 4 of BharatNet phase-3 is estimated to cost Rs. 4,099.69 crore and pertains to Karnataka, Goa and Puducherry, package 7 is anticipated to be worth Rs. 1,549.66 crore and entails works in Bihar.
ITI Ltd. L1 Bidder for Packages 8,9 & 15, Together Worth Rs. 4,559 Cr.
ITI Ltd., along with a consortium partner which was not specified by the company, has secured L1 bidder position for packages 8, 9 and 15 of BharatNet phase-3 project. Package 8 is to be executed in Himachal Pradesh, whereas works under package 9 will be undertaken in West Bengal, and Andaman & Nicobar islands. These two packages are estimated to cost Rs. 3,022 crore collectively.
Apart from this, the ITI-led consortium has also emerged as the lowest bidder for package 15 of the BharatNet phase-3 project which is estimated to be worth Rs. 1,537 crore, and is to be executed in North-East India. Arunachal Pradesh, Nagaland and Manipur will be covered in this package.
Commenting on this development, Mr. Rajesh Rai, Chairman and Managing Director, ITI Limited, said, “Emerging L1 for three big Packages of BharatNet Project in difficult terrains like Andaman and North East region is not only exciting but throws up many challenges for the Company, and my team is fully inspired to execute and deliver excellence yet again”.
Sterlite Tech.-Dilip Buildcon JV Wins for Rs. 1,625 Cr. worth of Works in J&K
Sterlite Technologies’ joint venture with Dilip Buildcon has secured works on package 13 of BharatNet phase-3 project which will be executed in Jammu and Kashmir. This package is anticipated to be executed at a cost of Rs. 1,625.36 crore.
Speaking of this order win, Mr. Praveen Cherian, CEO of STL’s Global Services Business, said, “We are bringing technology-driven solutions to fibre deployment, and that’s what sets us apart. Our Fibre Automation Solution enables a 3X faster deployment by infusing automation in the deployment process…That’s what we’re bringing to BharatNet in Jammu & Kashmir”.
Company Stocks Zoom After L1 Position on BharatNet Projects Made Public
Stocks of the aforementioned companies exhibited a marked increase after they made public their respective L1 positions on BharatNet phase-3 packages.
The most remarkable growth was seen in case of ITI Ltd., whose stock jumped by 10.86% to Rs. 337.29 apiece after the announcement of its L1 position in the aforementioned BharatNet packages, as compared to Rs. 304.24 apiece on the previous trading day.
Polycab India’s stock gained 3.79%, trading at Rs. 6,883.95 apiece on the day of their stock filing (6th November 2024) against Rs. 6,632.55 apiece a day earlier.
Sterlite Tech also recorded a 3.34% increase in its share price, to Rs. 126.21 apiece on the day of announcement of its L1 position from Rs. 122.13 apiece on the previous day.
Dilip Buildcon also exhibited an uptick in its share price with the company’s stock gaining 2.1% on the day of announcement of its BharatNet phase-3 order win.
Interestingly, HFCL’s stock remained almost flat, gaining 1.03% on the day of announcement of its L1 position pertaining to aforementioned works under BharatNet phase-3.
Brief Background of BharatNet Phase-3 Project
BharatNet Phase-3 project targets bringing broadband connectivity to about hitherto 2,50,000 unconnected Gram Panchayats (GPs) comprising about 6,40,000 villages, as well as strengthening internet connectivity in GPs connected in BharatNet phase-1 and phase-2. GPs will be connected via IP MPLS (Internet Protocol – Multi Protocol Label Switching) network. This network will comprise of many rings, with each ring connecting 8-10 GPs. A minimum of 100 Mbps bandwidth will be provided to each GP under BharatNet phase-3 project.