TelecomLive April 2024

IDC operations by NxtGen www.telecomlive.com 37 TelecomLIVE April 2024 extended on yearly basis on mutually agreed terms and condi- tions. After seven years, contract “may be extended on yearly basis”. BSNL: BSNL invited bids in April 2020 and January 2021, but there was no bidder. In March 2023 BSNL issued EoI for comments on RFP in which five companies had shown interest. In January 2024 tender was issued and opened, in which only one company has participated. TL: Since there were no response to earlier tenders and NxtGen was continuing to operate without any extension, BSNLwas duty bound to take immediate action on two counts: First, it should have proactively engaged with the other prospective bidders and addressed their concerns in the tender conditions. Second, it should have expedited the tendering process. After the March 2023 EoI, it took ten months for BSNL to come out with a tender in January 2024. Actually, it should have initiated the process way back in 2016 itself before the initial five year contract periodwas to expire. 2024Tender A perusal of the tender shows many of the conditions favoured NxtGen. For example, NxtGen has already occupied IDCs at three most sought after locations. And a new bidder practically cannot participate in this tender, unless NxtGen vacates it or buys their assets at a cost dictated by them. Also, minimum revenue share to BSNL from the very first year has been kept at Rs 2 crore per IDC, and minimum revenue share at 20 per cent. Specific tender clause was amended by BSNL to accommo- date NxtGen's requirement of including its existing business at these three BSNL IDCs. The clause was changed to: “ Th e mi n i mum a v e r a g e income from revenue share, referral and renewal amount to BSNL from IDCs catered by the selected DCSP (bidder) shall be Rs 2 crore per IDC of the trailing 12months from the date of commissioning of the IDCs, failing which BSNL shall b e d e du c t i ng t h e a b o v e revenue of Rs 2 crores per IDC from the revenue share of the DCSP.” Earlier it was: “The minimum revenue share to BSNL fromeach IDC shall be Rs 2 crore per annum, failing which BSNL shall be at liberty to terminate the contract and forfeit PBG.” Also, clauses related to higher revenue share from referral and renewal orders secured by BSNL on nomination basis and other than nomination basis, were deleted. This toowas to favourNxtGen. TLQs toNxtGen We also sent questions to NxtGen. The same has been reproduced below: In our forthcoming we will be doing a story on NxtGen fraud at BSNL IDCs. In this regard, you may like to respond to the follow- ings: 1. In violation of tender condi- tion, you had started receiving orders directly in your name. As a result, two things happened. One, you got an opportunity not to disclose the customer to BSNL. Two, you didn't pay revenue share on majority (about 90%) of the order value to BSNL. You are not disclosing them the full order value. 2. Even after several reminders, you have not provided them NMS tool, which is capable of detecting what customers you have hosted onBSNL IDCs. 3. You ar e do i ng cus t ome r enabling/ disabling remotely from your Bengaluru office. There is no possibility of BSNL knowing the actual position of customers working from BSNL IDCs. There are apprehensions in BSNL that you are hiding a lot. NxtGen response toTL We received NxtGen's response. analysis are as follows: BSNL: BSNL received complaint against NxtGen in March 2021. It conducted forensic audit through independent audit agency. It has recovered Rs 1.29 crore and interest of Rs 21.34 lakh. After this, there is no further revenue loss to BSNL. TL: No forensic audit has been conduc ted so far . A CA was engaged, which too had recom- mended detailed inspection by experts to know how many more customers have been left out unreported. All the other audit reports, whether physical or technical, also had mentioned that experts should examine it in detail asNxtGenwas not cooperating. It has been repeatedly stated in various BSNL reports that NxtGen has been not been cooperating with BSNL. The NMS tool supplied by them to BSNL MH, to know the users details, was of no use. Despite repeated reminders, they were not taking any action (see Scan-11 at pg 31). Moreover, BSNL is silent on an important question raised by TL to CMD BSNL on how NxtGen was allowed to take orders in its own name, against the tender condi- tions. This has resulted in substan- tial revenue loss to BSNL as NxtGen is not sharing any revenue with BSNL on more than 90 per cent of order value. No one in BSNL has calculated the loss on this account. It seems BSNL welcomes being defrauded in this manner. Any other compnay would have actively pursued how it has been defrauded. BSNL: BSNL started IDC services in 2012. Initial contract was for seven years, extendable to ten years. The contract was extended till August 2022. BSNL is still continuing with NxtGen to avoid disruption in service. TL: As per EoI, the contract period was five years, with sixth and seventh year being optional which could be renewed on yearly basis at the discretion of BSNL. After seven years also, contract could be