State-run telco Mahanagar Telephone Nigam Limited (MTNL) has now approached the government for the allotment of 4G spectrum in the circles it operates. MTNL is seeking 4G spectrum in two circles Mumbai and Delhi in two bands, and the telco even offered its equity in return. MTNL CMD P K Purwar said to PTI that the firm has written to the Telecom Department regarding the spectrum allotment in the 1800 MHz and 2100 MHz bands required to launch 4G services. MTNL is making this move to retain the subscriber base and to sustain in the competitive Indian telecom market. "To survive in the mobile telephony market, 4G presence is a must. MTNL has submitted a proposal to the Department of Telecom (DoT) for allotment of 4G spectrum recently," Purwar told PTI.
MTNL has its operations in both Mumbai and Delhi circles, while BSNL operates in the rest of the 19 telecom circles. So the telco is looking for 4G spectrum in both the circles. "In the market, over 85% downloads are taking place in data in 4G. In this competitive landscape, every single operator has to have a presence in 4G. To compete effectively, MTNL also requires 4G services in its portfolio," he said.
Furthermore, it is reported that MTNL is seeking 10MHz in Delhi in the 1800 band and 5MHz in Mumbai in 2100 band. If the government grants the required spectrum to the company, MTNL is looking to roll out 4G services to the consumers in this financial year itself. For the unaware, MTNL currently has spectrum in the 800 MHz, 1800 MHz and 2100 MHz bands along with 2.2 MHz in the 1800 band and 5 MHz in the 2100 band, which the firm is currently using to deliver 3G services in the circles.
"We have said that government has two roles -- one as licensor and another as a promoter of MTNL. As a licensor, they are duty-bound to take their financial charges for allocation of spectrum. MTNL has requested that payment should be taken by the government in the form of equity. As per our initial assessment, the spectrum block should cost roughly Rs 6,500 crore," Purwar said.
Furthermore, Purwar added that the firm is ready to issue equity shares to the government as per the market share in place of spectrum allocated, which will ensure that MTNL will not be burdened with additional debt.
Being a government-owned PSU, it currently holds 56% stake in MTNL, followed by Life Insurance Corporation with 19% stake and the rest is public. MTNL currently has a debt of Rs 17,000 crore, and it has been a loss-making entity for the government for a long time. During the FY17, MTNL's losses stood at Rs 2,970 crore.
There were some rumours about the potential merger of MTNL and BSNL because both the entities have been posting losses for a number of years. But the government has ruled out the allegations and stated that the DoT is preparing a revival plan for MTNL.