MTNL to Release Tender for Equipment as Telco Ramps Up Plans of 4G Launch

Mahanagar Telephone Nigam Limited (MTNL), the government led telco which is running operations in Delhi and Mumbai plans to roll out 4G services with the help of Rs 6,292 crore capital issuance from the government. For the rollout of 4th generation network services, the telco will also soon release a tender for searching a vendor partner. MTNL has planned that it would relay its 4G services in the 1800 Mhz and 2100 Mhz spectrum bands.

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Plans to Launch 4G Services

MTNL Chairman, PK Purwar, in a statement reported by ET, said, “We have submitted a plan for preferential equity, and without diluting the company’s ownership, we have said that we will issue preferential capital of equivalent amount which is coming at Rs 6,292 crore for 4G launch.” He further added, “MTNL has asked for 1800 Mhz spectrum band in Delhi and 2100 Mhz in Mumbai. The proposal is in the advanced stage of persuasion within the government.”

Notably, being a listed company, 56% stake in the Delhi based public telco is held by the government while Life Insurance Corporation of India (LIC) owns 19% stake. The rest 25% shares in MTNL are public.

MTNL Under Debt of Over Rs 18,000 Crore

MTNL has chosen the way of equity infusion for raising more capital for the company. This step would ensure that the government led telco further doesn’t slip under the burden of more debt as already MTNL stands under a staggering debt of Rs 18,000 crore. If we are to believe executives and experts, then the MTNL’s proposal of equity infusion is going to be considered positively by the government which would mean an aid during tough times for the telecom operator. Telecom Minister, Manoj Sinha had also promised similar support for MTNL in an event held by MTNL Mazdoor Sangh.

To recall, the competition which was sparked by the entry of Mukesh Ambani led telco Reliance Jio deepened losses for the metropolitan based telecom operator, MTNL. Given that MTNL was lagging behind in the rollout of the latest network technologies translated into growing losses for the company.

Support from Government in the Form of Equity Infusion

As per reports by ET, in the quarter ending March, MTNL reported losses of Rs 900 crore. Annually, the total losses for the telco stand at Rs 2,973.03 crore which is a rise from Rs 2,941.08 crore, which the telco has reported in the previous year.

MK Purwar said about this development, “We are already in a process to finalise the tender to select equipment vendor, and the moment, it (proposal) gets Cabinet approval, we will float it.” The executive also highlighted that the telecom giant would launch 4G services in the coming 6 to 8 months once radio waves are allocated.

It’s noteworthy that in the two metropolitans, MTNL boasts of 8 million subscribers out of which 1.1 million subscribers are for broadband. Now if MTNL manages to launch 4G services soon, it would be on the path of making progress since the move would render it in a better position to tackle the competition from other telcos.

Last month in September, telecom minister Manoj Sinha had also met with MTNL Mazdoor Sangh to discuss the future pathway for MTNL and its survival. The telecom minister had hinted towards better prospects for the government led telco in coming times. This recent development seems to be the next step in this regard.

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