MTNL to ink 3G network sharing deal by January

State-run Mahanagar Telephone Nigam Ltd is expect to finalise agreements for sharing its third generation (3G) mobile network with private service providers by early next year.

MTNL expects 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.

The company has received bids from two companies to share its 3G network in the two circles where it offers mobile services, a senior company official told Business Standard. It expects to finalise the agreements by the end of January. He wouldn’t divulge who the bidders were.

MTNL is also in talks with its sister concern, Bharat Sanchar Nigam Ltd, to share the latter’s network for providing roaming services to its 3G customers. BSNL offers mobile services across the country, barring Delhi and Mumbai circles, where MTNL operates.

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.

Two private operators, Reliance Communications and Tata Teleservices, have recently launched 3G mobile services. These services allow mobile users to access internet and download videos and movies at a much faster pace, apart from offering video voice calls.