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TATA Teleservices and Aircel are poised to bag third-generation spectrum in the lucrative Delhi and Mumbai metros as they are the only bidders for MTNL's offer to share its 3G network with two firms that pay the highest price.
Aircel had won 3G airwaves in 13 circles and Tata Teleservices in nine when these frequencies were auctioned last year, but both these companies had failed to bag spectrum in Delhi and Mumbai. They had lost out to the country's three largest mobile phone companies by both revenues and customers—Bharti Airtel, Reliance Communications and Vodafone Essar—in these metro cities, which are estimated to account for a fifth of the mobile industry's revenues.
MTNL had set 1,400 crore as the base price per operator when inviting bids from other telecom service providers to use its 3G frequencies, which enable services such as video calling and high-speed internet on phones.
The state-owned operator will make a minimum of 2,800 crore from this deal. "The financial bids of both Tata Teleservices and Aircel will be opened in January—it is possible that the bid amount may be comparatively higher than the base price," a top MTNL executive with direct knowledge of the development told ET.
"There is also a revenueshare component—this depends on the type of 3G service offered—for instance, there are different slabs for voice and video calls, highspeed internet and other data services," this executive added.
Both Tata Teleservices and Aircel declined to comment, but a top executive from one of these companies confirmed that they were the only mobile phone companies to have submitted bids to MTNL. Cos plan strategic roaming alliances
ALL the six private players that won 3G airwaves are in talks with each other for strategic roaming alliances to offer these high-end services across the country. Such alliances have been made necessary since no player had won pan-India 3G airwaves during the auctions.
So far, only two private operators—Reliance Communications and Tata Teleservices—have launched 3G services.
The deal also involves the winners sharing 3G airwaves outside these metro cities with MTNL when the latter's customers are on roaming. Between Aircel and Tata Teleservices, the duo jointly has 3G airwaves in all circles except Himachal Pradesh. Put simply, the deal will also enable MTNL to offer third-generation services on a pan-India level, except in Himachal Pradesh, for which it is in talks with BSNL.
MTNL's shares closed 2.91% higher on Friday at 54.85 on BSE.
For Tata Teleservices, which is yet to launch GSM-based mobile operations in Delhi, the deal with MTNL will enable the company, in which Japanese major NTT DoCoMo has a 26% stake, to kick off both second- and third-generation cellular services in the city.
While private operators were given 3G spectrum in September 2010, state-owned telcos MTNL and BSNL were given these airwaves in late 2009. Both BSNL and MTNL then matched the winning bids by private companies in the auction process.
MTNL had taken a 7,000-crore loan to pay for 3G airwaves in Delhi and Mumbai, and company executives said the spectrum-sharing deal will enable them to meet interest costs and also partly service this loan.
Idea Cellular, which had won 3G airwaves in 11 circles, but not Delhi and Mumbai, did not put in a bid. An industry executive said Idea's failure to participate was yet another indicator that the Aditya Birla group company along with Bharti Airtel and Vodafone Essar was working out a strategic to offer third-generation services on a pan-India level.
These three GSM telcos jointly have 3G spectrum in all circles except Orissa. Bharti had bagged 3G airwaves in 13 circles and Vodafone Essar in nine. They also jointly own the world's largest telecom infrastructure company, Indus Tower, enabling them to share mobile networks for 3G rollout.
Aircel had won 3G airwaves in 13 circles and Tata Teleservices in nine when these frequencies were auctioned last year, but both these companies had failed to bag spectrum in Delhi and Mumbai. They had lost out to the country's three largest mobile phone companies by both revenues and customers—Bharti Airtel, Reliance Communications and Vodafone Essar—in these metro cities, which are estimated to account for a fifth of the mobile industry's revenues.
MTNL had set 1,400 crore as the base price per operator when inviting bids from other telecom service providers to use its 3G frequencies, which enable services such as video calling and high-speed internet on phones.
The state-owned operator will make a minimum of 2,800 crore from this deal. "The financial bids of both Tata Teleservices and Aircel will be opened in January—it is possible that the bid amount may be comparatively higher than the base price," a top MTNL executive with direct knowledge of the development told ET.
"There is also a revenueshare component—this depends on the type of 3G service offered—for instance, there are different slabs for voice and video calls, highspeed internet and other data services," this executive added.
Both Tata Teleservices and Aircel declined to comment, but a top executive from one of these companies confirmed that they were the only mobile phone companies to have submitted bids to MTNL. Cos plan strategic roaming alliances
ALL the six private players that won 3G airwaves are in talks with each other for strategic roaming alliances to offer these high-end services across the country. Such alliances have been made necessary since no player had won pan-India 3G airwaves during the auctions.
So far, only two private operators—Reliance Communications and Tata Teleservices—have launched 3G services.
The deal also involves the winners sharing 3G airwaves outside these metro cities with MTNL when the latter's customers are on roaming. Between Aircel and Tata Teleservices, the duo jointly has 3G airwaves in all circles except Himachal Pradesh. Put simply, the deal will also enable MTNL to offer third-generation services on a pan-India level, except in Himachal Pradesh, for which it is in talks with BSNL.
MTNL's shares closed 2.91% higher on Friday at 54.85 on BSE.
For Tata Teleservices, which is yet to launch GSM-based mobile operations in Delhi, the deal with MTNL will enable the company, in which Japanese major NTT DoCoMo has a 26% stake, to kick off both second- and third-generation cellular services in the city.
While private operators were given 3G spectrum in September 2010, state-owned telcos MTNL and BSNL were given these airwaves in late 2009. Both BSNL and MTNL then matched the winning bids by private companies in the auction process.
MTNL had taken a 7,000-crore loan to pay for 3G airwaves in Delhi and Mumbai, and company executives said the spectrum-sharing deal will enable them to meet interest costs and also partly service this loan.
Idea Cellular, which had won 3G airwaves in 11 circles, but not Delhi and Mumbai, did not put in a bid. An industry executive said Idea's failure to participate was yet another indicator that the Aditya Birla group company along with Bharti Airtel and Vodafone Essar was working out a strategic to offer third-generation services on a pan-India level.
These three GSM telcos jointly have 3G spectrum in all circles except Orissa. Bharti had bagged 3G airwaves in 13 circles and Vodafone Essar in nine. They also jointly own the world's largest telecom infrastructure company, Indus Tower, enabling them to share mobile networks for 3G rollout.
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