MTNL says can't meet MNP deadline

Even as it selected a franchisee to run its 3G telecom services in Delhi and Mumbai circles, state-run MTNL said it was unlikely to be able to implement mobile number portability by the government deadline of December 31, which is supposed to bind all players.

"We will not be able to implement MNP before December 31 due to technical problems. We are looking at implementing it by March 31, 2010," said Chairman and Managing Director R S P Sinha.

The government had  said MNP must be introduced on December 31 in the metro cities and by March in the rest of the country. The Telecom Regulatory Authority of India had also fixed set the maximum porting charge, of Rs 19, which mobile subscribers would have to pay for changing their service providers while retaining their mobile numbers. MNP is expected to help in increasing competition between providers.

Meanwhile, the United Kingdom-based Virgin Mobile has been selected by MTNL for managing its 3G services in the Delhi and Mumbai circles. MTNL had shortlisted Virgin Mobile and BK Modi-promoted Spice Group for managing the 3G network after it issued a global tender for this.

Under the deal, Virgin would implement and manage MTNL's 3G network on a franchisee model, with assured revenue of $51.7 million (Rs 240 crore) in each of the cities over a three-year time frame. Failing which, a 10 per cent penalty on the shortfall will be charged. MTNL has also sought a guaranteed minimum average revenue per user of Rs 500 a month from the first day.

When asked if Virgin has been selected, Sinha said, "We are in the process of finalising it…a decision would be take soon." However, sources said the decision is through. Virgin Mobile already has a partnership with Tata Teleservices to market CDMA-based mobile services in the country.

MTNL has so far been able to garner 160,000 3G subscribers and is targeting a base of about 500,000-600,000 by March 2010, Sinha said.

MTNL and BSNL, the two state-owned units, have been given 3G spectrum ahead of private players but neither has been able to majorly cash-in on it. With the 3G service, consumers would be able to download videos and data and access internet at a very high speed. The 3G auction is slated to happen in January next year, after which private players would join the two PSUs in offering 3G services.

MTNL has reserved the right to alter or bring in additional franchisees if the private player is not able to accomplish its targets after the three-year period. MTNL would provide the infrastructure, including land and air-conditioning on a chargeable basis for co-locating the equipment of 3G franchisee.

While the private player can use MTNL's spectrum, it will have to set up its own network.