MTNL to finalise deals on 3G network sharing

Mahanagar Telephone Nigam Ltd (MTNL) will shortly conclude agreements with private service providers by January 2011 for sharing its third generation (3G) mobile network. MTNL foresees an annual revenue of about Rs 300 crore from 3G roaming agreements with other telecom operators, who could not win 3G spectrum in the Delhi and Mumbai circles in the recent auction. MTNL has received bids from two companies to share its 3G network in the two circles. Deal would be finalised by the end of January. The bidders are not revealed. MTNL is also in talks with its sister concern, Bharat Sanchar Nigam Ltd, to share network for providing roaming services to its 3G customers.

MTNL has taken Rs 7,000 crore of loans to pay for spectrum for both 3G and Broadband Wireless Access and it would be difficult for the state sector undertaking to service such big loans without making these operations profitable. Both MTNL and BSNL were given 3G spectrum at least a year ahead of the auction for the private players. However, their services did not pick much and they could not take the first-mover's advantage. In June, MTNL had invited bids from local telecom service providers to use its 3G mobile network. It revised the tender in September. The agreement will allow mobile users of operators without 3G spectrum in Delhi and Mumbai to roam on MTNL's network in these circles. Bharti Airtel, Vodafone Essar and Reliance Communications were the only operators who bagged 3G spectrum in Delhi and Mumbai, considered premium markets for telecom service providers.