Financial Daily from THE HINDU group of publications
Friday, Jun 24, 2005
Financial Daily from THE HINDU group of publications Friday, Jun 24, 2005 |
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Info-Tech
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Telecommunications MTNL withdraws Rs 1,500-cr tender for 3G equipment Thomas K. Thomas
New Delhi , June 23 IN a setback to its cellular roll-out plans, Mahanagar Telephone Nigam Ltd (MTNL) withdrew the Rs 1,500-crore global tender for procuring third generation (3G) network for over 4 million lines. MTNL officials have sited `minor technical glitches' in the tender as the reason for the withdrawal but did not specify as to when the process would begin afresh. The Chairman and Managing Director had earlier said that the company wanted to be the first mover in the 3G segment as it had lost considerable ground in the GSM market to private operators. However, the withdrawal of the tender will only create further delays in rolling out high-speed wireless broadband services. According to industry sources, MTNL had to withdraw the tender owing to some discord between the Chinese manufacturers and the European companies over the terms and conditions stipulated in the tender document. MTNL had floated a draft tender document a few months ago for taking inputs from potential bidders. MTNL had forayed into the mobile market a few years ago riding on huge tariff cuts. However, subsequent delays in procuring network equipment and SIM cards pulled back the roll-out plans. While private operators were adding nearly 50,000 users every month, MTNL was reporting a stagnant subscriber base. Meanwhile, private GSM operators such as Bharti, Hutch and Idea have kick started the process to move into the 3G domain and have already applied for radio frequency. The other state-owned company Bharat Sanchar Nigam Ltd has also applied for radio frequency. This comes even as the Government is yet to spell out its policy with respect to 3G services. Third generation services allow high-speed data connectivity on mobile phones. While at present data speeds of broadband Internet services go up to an average of 256 kilo bits per second (kbps), 3G services allow more than 380 kbps on mobile handset. So one can watch a movie, play interactive games, download data from the world-wide-web on the move. Globally, a number of operators such as NTT DoCoMo in Japan and Hutchison in the UK have deployed 3G services. While the consumer benefits from high-speed mobile connectivity, 3G is expected to give a fillip to the operator's falling average revenue per user (ARPUs) owing to decreasing voice tariff.
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