State-owned Mahanagar Telephone Nigam Limited (MTNL) has sought preferential capital issuance of Rs 6,292 crore from the government to launch fourth-generation or 4Gservices and would soon release a tender to select gear vendor partner for the ambitious rollout.
MTNL that operates in Delhi and Mumbai metropolitans, is planning to launch high-speed data services on the 1800 Mhz and 2100 Mhz spectrum bands respectively.
“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,” MTNL chairman PK Purwar told ETTelecom.
Being a listed company, the government has a 56% stake in the Delhi-based service provider, while the Life Insurance Corporation (LIC) holds 19% and rest 25% of its shares are public.
“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,” he added.
The move to issue equity shares to the government for required airwaves, if approved, would not bring any additional debt to the state-driven telecom service operator which is already reeling under close to Rs 18,000 crore of financial burden.
The top executive, however, said that the government has already indicated that the proposal would be considered positively, and it would also help to turn a corner for the ailing telecom company.
Battered by intense rivalry in India’s telecom sector after the foray of billionaire Mukesh Ambani-owned Reliance Jio in September 2016, the state-run telco’s loss has widened, which is yet to deploy high-speed data networks despite its presence in top two urban or data-hungry locations.
MTNL has posted standalone net loss of Rs 900 crore in the quarter ended March 31, 2018, and for the full year, the loss has risen to Rs 2,973.03 crore from Rs 2,941.08 crore, the telco had reported a year ago.
“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,” Purwar said, adding that the telco could commercially rollout 4G services within 6 to 8 months once radio waves are allocated.
4G spectrum would help the service provider to compete in the market as the mobile business, according to Purwar, is highly titled towards the newer technology today.
Currently, the state-controlled telco has a total of more than 8 million subscribers that includes 1.1 million broadband consumers.