The Hindu Business Line : MTNL to tender for 2 m GSM lines

Mahanagar Telephone Nigam Ltd (MTNL) plans to float tenders for equipment for two million GSM connections for next year, one million each in Delhi and Mumbai, its circles of operation.

"The tender will probably be floated early next month," said Mr R.L. Dube, Executive Director, MTNL, Mumbai.

With equipment costs currently at approximately Rs 4,000 for one connection, the contract size for two million lines will be Rs 800 crore.

MTNL's capital expenditure plan for Mumbai alone is Rs 1,200 crore, the amount that many private operators set apart for pan-India operations.

How large this expansion is going to be for MTNL may be gauged from the fact that the company, as of June 2004, had only 1.92 lakh connections in Delhi and 2.24 lakh connections in Mumbai.

The total number of connections in these cities stands at 3.36 million and 3.05 million currently. Which means that with this expansion, MTNL would be adding 25-30 per cent to the total existing GSM capacities in these cities.

The impending tender is the result of MTNL having learnt a bitter lesson with its Dolphin venture - it had to stop issuing connections last month as network expansion failed to keep pace with demand.

In Mumbaithe capacity of 2.25 lakh connections has been exceeded this month, with an additional 10,000 in the waiting queue, said Mr Dube. Earlier tenders have often seen a losing bidder or two complain to the Central Vigilance Commissioner, which has led to re-examination of tenders.