Report: MTNL strikes 3G spectrum deals with Tata and Aircel - Mobile World Live

Report: MTNL strikes 3G spectrum deals with Tata and Aircel

04 JAN 2011

Indian operators Tata Teleservices and Aircel are poised to expand their new 3G services into the key metro areas of Delhi and Mumbai after reportedly securing deals to use 3G frequencies owned by state-owned operator MTNL. According to a report in India’s Economic Times newspaper, the two operators are the only bidders in an auction by MTNL to find 3G network-sharing partners. MTNL has set a base price of INR1,400 crore (US$315 million) per operator for access. “The financial bids of both Tata Teleservices and Aircel will be opened in January—it is possible that the bid amount may be comparatively higher than the base price,! an unnamed MTNL executive told the newspaper. The same source noted that there would also be a “revenue-share component” to the deal. Aircel won 3G licences in 13 circles and Tata Teleservices in nine in the country’s 3G auctions last year, but failed to bag spectrum in Delhi and Mumbai. These two cities are estimated to account for a fifth of India’s mobile industry’s revenue.

For MTNL – which only operates in Delhi and Mumbai – the deal will also allow its customers to roam onto its 3G partners’ networks when outside of the metro areas. Aircel and Tata Teleservices (combined) have 3G licences in all other telecom circles except Himachal Pradesh. While private operators were only allocated 3G spectrum in September 2010, MTNL and state-owned sister company BSNL were given these airwaves in late 2009. Both state-owned firms then had to match the winning bids made by private companies at auction. MTNL had taken a INR7,000 crore (US$1.6 billion) loan to pay for 3G airwaves in Delhi and Mumbai, and company executives said the spectrum-sharing deal will enable them to service this loan.


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