Further Indian licenses put on hold, state telcos push forward
Published: 10 August, 2009
READ MORE: M&A | India | MTNL | WiMAX
Continued ...
And MTNL is following its compatriot down the franchise path for WiMAX, seeking initial bids from potential technology partners, which would bear much of the cost of the equipment in return for a revenue share. It has not released full details of the franchise terms but wants a single vendor in each city, for seven years. MTNL also needs partners with experience of marketing advanced services, given the sorry record in 3G uptake so far. A Mumbai-based analyst told Dow Jones: "Marketing of these high end services is very important, and MTNL, as a government-owned company, has been lacking in it."
The telco's tender document says: "This revenue share is only for providing broadband access to customers. All other revenue derived from various value added services shall be shared between the parties on mutually agreed terms.... The proposed WiMAX system will provide fully converged broadband data and voice services such as access to internet, VPN clients". The bidders must provide a guarantee deposit of INR150m, valid for at least three years, for each of the two cities, and cannot be an existing telecoms service provider in either, or sign similar franchise deals with another telco. The deadline is September 16.
MTNL is targeting 500,000 users for its WiMAX services by 2014. It will build out capacity for 100,000 users in each city in year one, increasing this to 250,000 in year two and 400,000 in year three. In the first year of commercial operation, the bidders should gain a minimum of 50,000 users in each of the two metros.
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