The Hindu Business Line : MTNL plans to expand beyond Mumbai, Delhi

MAHANAGAR Telephone Nigam Ltd plans to pick equity in private cellular and fixed line companies in a bid to expand beyond Delhi and Mumbai circles. The State-owned company has listed this strategy to expand operations in the current financial year.

While MTNL officials are tight lipped, senior government sources said the alliance could be effected either through a majority stake or a complete acquisition. Idea Cellular, Aircel and BPL have been scouting for partners the last few months. Sources however said the proposal was in its initial stage and no concrete decisions have been taken by MTNL's board of directors.

However, MTNL's plans have to contend with the telecom licence norms, which do not allow the same promoter to acquire more than 10 per cent equity in two companies operating in the same circle. While the Government owns 56 per cent of MTNL, it has a 100 per cent stake in BSNL, which offers services in all telecom circles except Delhi and Mumbai. Recently, the Government had rejected proposals from Idea Cellular and Hutch on the same grounds.

With Delhi and Mumbai becoming saturated markets, MTNL wants to expand beyond the two cities. It has already tied up with State Electronic Corporations to offer Internet services. Its other strategy involves moving to the international market. The company has bagged the licence to offer long distance service in Mauritius. It also offers telecom services in Nepal through a joint venture. Third World countries like Kenya are next in sight.

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