New Delhi, Oct 7 (Calcutta Tube) The government Tuesday approved continuation of a quota system which ensures bulk orders to Bangalore-based state-owned telecom equipment manufacturer ITI for another two years from public sector telecom service providers.
The quota system, which makes it mandatory for state-run telecom companies BSNL (Bharat Sanchar Nigam Ltd) and MTNL (Mahanagar Telephone Nigam Ltd ) to place 30 percent of its equipment requirement orders with ITI, will now be continued for the next two years, according to a decision by the Cabinet Committee on Economic Affairs.
An earlier such scheme expired Sep 20.
In addition to the 30 percent reservation for BSNL or MTNL equipment, the two companies will also have to give 70 percent advance against the orders placed, ‘so that ITI does not face the problem of working capital for the execution of orders,’ said an official statement.
ITI’s accumulated losses during the last fiscal stood at Rs.3,513 crore.
The preferred vendor treatment will continue for all products manufactured by ITI and all turnkey project like GSM network roll-out.
‘In today’s highly competitive environment it is very difficult for ITI to survive on its own without the benefit of quota which BSNL and MTNL has been extending for ITI for the last many years,’ said the statement.
‘The extension of the benefit of 30 percent quota with 70 percent advance will ensure enough orders for ITI for the production activities,’ it added.
–Indo-Aian News Service