Siemens and Ericsson to take on work without Nokia

29 November 2002

Sweden's Ericsson and Germany's Siemens are poised to win the bulk of the contracts to install one million new mobile phone lines for Telecommunications Company of Iran (TCI) following the exit of Finland's Nokia from the competition. The Finnish firm had been well placed to win a significant share of the project, having submitted the lowest offer in the repricing of the project earlier this year (MEED 26:7:02).

Nokia had tabled an offer of about Eur 77 million ($76 million) for both the project's switching and radio packages in July, significantly undercutting prices from Siemens and Ericsson, which had submitted bids nearer to Eur 120 million ($119 million). Both Ericsson and Siemens have since agreed to participate in the project at the price offered by Nokia.

However, industry sources say TCI, which had initially planned to incorporate all three companies into the project, has decided to go ahead with Siemens and Ericsson, having failed to renegotiate a final price for the Finnish firm's share in the project's radio package, valued at Eur 53 million ($52 million). With Nokia out of the competition, TCI has determined that Siemens will provide 52 per cent of the radio equipment, while Ericsson will supply another 31 per cent. Two local firms will provide the remaining 17 per cent.

On the switching side, priced at Eur 25 million ($24 million), Siemens is set to supply

37 per cent of the required equipment, while Shiraz-based Iranian Telecommunication and Manufacturing Company (ITMC), in which Siemens is a 20 per cent shareholder, will provide 15 per cent. The remainder will come from Ericsson.

A final agreement between TCI and the equipment suppliers has yet to be signed, industry sources say.

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