Motorola to supply 4 lakh GSM lines to MTNL

Confronted with a severe capacity crunch, state-owned Mahanagar Telephone Nigam Ltd will soon expand its network by an additional 4 lakh GSM lines. The company has awarded a contract for this purpose to US-based telecom equipment vendor Motorola.

MTNL executives said this was a temporary solution to address the urgent requirement for additional capacity in both Delhi and Mumbai. The expansion cost for Delhi was estimated at Rs 54 crore, while for Mumbai it would be about Rs 30 crore, they added.

The Motorola deal comes in the backdrop of MTNL's global tender for 20 lakh additional lines for Delhi and a contract worth Rs 750 crore given to ITI-Alcatel for the same number of lines for its Mumbai circle.

"Currently, we have a capacity of 8.25 lakh lines each in Delhi and Mumbai, with a load factor of over 80 per cent. This is nearly equivalent to complete capacity utilisation. The deal with Motorola will enable us to increase this mobile network capacity to 10.25 lakh lines each in the two metros. It will also enable us to hold on until ITI-Alcatel begins supply of 20 lakh lines for Mumbai and our global tender for an equal number of GSM lines for Delhi is finalised," MTNL sources said.

For Motorola, this marks the second deal with MTNL. In 2004, the company had won a contract to supply 8 lakh GSM lines to the PSU.

The sources said MTNL had decided to award this contract to Motorola rather than float a fresh tender to avoid delays associated with procuring equipment. Besides, the 2004 GSM line deal with Motorola also contains a clause which stipulates that MTNL can place orders for an additional 50 per cent lines.

"We decided against floating a fresh tender because the deal with Motorola permits us to have the benefit of the earlier price, at 2004 rates, for 2 lakh lines," they added.