BSNL, the Indian state-run operator, has awarded Alcatel-Lucent and ZTE contracts for the supply of equipment to support its long-anticipated network expansion, reports Dow Jones Newswires, after several companies dropped out of the running.

The operator invited companies to make bids to support 14.37 million new lines a year ago and BSNL director for consumer mobile phone services, R. K. Agarwal, said the purchase orders “have already been handed out”. The total contract value is estimated to be around US$1.09 billion.

According to Agarwal, ZTE was the lowest bidder for telecom network equipment while Alcatel-Lucent offered the best price for gear to handle prepaid subscribers. ZTE said in a statement to Dow Jones Newswires that the network capacity being added will be able to support 10.15 million new users in the north and south of India.

BSNL has been planning to expand its mobile network for several years in order to keep pace with the likes of Bharti Airtel and Vodafone India. Network capacity issues have been blamed for its inability to produce a profit. Until now, delays in government clearance for the network expansion have held up the sourcing of network equipment.

Vendors such as Huawei, Ericsson and Nokia Siemens Networks all reportedly withdrew from the bidding process for the network equipment tender in June, as they couldn’t match ZTE’s price, reportedly US$842 million.