MTNL to float Rs 200 cr tender for network expansion

State-run MTNL is likely to come out with a nearly Rs 200 crore tender for expansion of 2G and 3G network services next month.

"The company is likely to float a tender of around Rs 200 crore next month for expansion of capacity for 2G and 3G services in Delhi and Mumbai service areas," a source close to the development said.

The company is looking to offer 2G, 3G and broadband services at affordable price to remain competitive in the market, sources added.

MTNL had already extended the date for submission of bids to roll out wireless broadband service by the third party in Delhi and Mumbai circles.

In the latest expression of interest (EoI) document, the company had revised date of submitting bids to January 23, from January 4 earlier, for submission of bids.

MTNL has one slot of 20 MHz Broadband Wireless Access (BWA) spectrum each in Delhi and Mumbai circle for Rs 4,533.97 crore in 2010.

The company has been looking to outsource rollout of its BWA service to a third party which will be responsible to manage end to end services as well as regulatory requirement. The EoI is open for participation of firms across globe.

The company has already sent a proposal to Department of Telecom for surrendering its BWA licence if the current tender fails to bring in interested parties.

Besides, in a way to cut cost the company has already asked for full financial support for offering voluntary retirement scheme (VRS) to its employees.

MTNL has submitted a proposal, duly approved by its board seeking 100 per cent financial support from the government for bringing out cadre-specific VRS for MTNL employees.

As per FY10, the company's manpower stood at 44,910 employees.

MTNL had reported a loss of Rs 850 crore for the first quarter ended June 30, 2011, mainly on account of expenditure on staff cost and retirement benefits.

The company had a loss of Rs 451.4 crore in the April-June quarter last year.

During the quarter, the company had actual payout on staff cost for retirement benefit at Rs 108 crore, up 60.71% from Rs 67 crore in the year-ago period.