Indian state-owned operator MTNL has received just two bids from companies interested in becoming a franchise partner for its fledgling 3G services. According to India’s Economic Times, which cites comments from a senior MTNL official, Virgin Group and Spice Group, a local company, are the only firms to have submitted proposals to date. “We have got bids from Virgin and Spice and are evaluating the technical parameters. We will look at their financial bids only if they are technically qualified,” MTNL director Kuldip Singh told the newspaper. According to earlier reports, MTNL had approached several big names over a possible partnership, including Verizon, Orange, BT, AT&T and Cable & Wireless. But Economic Times notes that at least one international operator dropped out as it did not see MTNL competing effectively in 3G with India’s privately-owned mobile operators.

As a state-owned entity, MTNL has been allocated 3G spectrum ahead of the delayed private auction for Indian 3G spectrum and has already rolled out 3G in its two telecoms service areas, Delhi and Mumbai. But subscriber interest in the new networks has been muted; MTNL is reported to have only signed up around 1,000 3G subscribers to date. According to MTNL’s tender documents, its 3G partner will need to deliver INR300 million (US$6.1 million) in revenue from 3G services in the first year in each of the two telecom service areas, rising to INR1.2 billion in year two and INR2.4 billion in year three. One unnamed telecoms expert told the Economic Times that Virgin was most likely to land the deal as it has experience in running 3G services in Europe.