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MTNL hires PWC to scout for BWA services franchisee

23 May 2011 Evaluate

State-owned Mahanagar Telephone Nigam (MTNL) has hired global consultancy firm PricewaterhouseCoopers (PwC) for framing the expression of interest (EoI) for renting out BWA spectrum to a franchisee in Delhi and Mumbai. Two years ago, MTNL which operates in Delhi and Mumbai was allocated 3G and BWA spectrum, had paid for it in line with other private players who bid for the airwaves in the auction held last year in May-June. For BWA, Delhi and Mumbai saw the highest bids at Rs 2,241.02 crore and 2,292.95 crore, respectively.

MTNL is open for any technology Long Term Evolution (LTE) or WiMax technology and will leave it to franchise. LTE technology offers much faster internet speeds that allow users to stream high quality audio and video. Whereas, Worldwide Interoperability for Microwave Access (WiMaX) provides wireless data over long distances in a variety of ways, from point-to-point links to full mobile cellular type access.

MTNL has already launched 3G mobile services. Earlier, MTNL had taken the same franchise route to sell its 3G services in two circles and had floated a global (EoI) for 3G services franchisee. But due to procedural issues the tender is still on hold.

In FY11, the telecom major had reported a net loss of Rs 2,826 crore up 8.27% from Rs 2,610.9 crore in the same period previous year. Total income rose to Rs 3,841.2 crore as against Rs 3,781 during the period under consideration.

It is planning to restructure its Rs 7,000 crore loan taken for buying 3G and BWA spectrum last year. The PSU is planning to convert Rs 3,000 crore loan into long term debt. The company has already restructured Rs 3,500 crore of debt, repaying Rs 500 crore and tying up with two state-run banks for the rest Rs 3,000 crore.

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