MTNL to invest Rs 2,300 cr in FY06

State-run MTNL will invest about Rs 2,300 crore (Rs 23 billion) in 2006-07 for expansion and upgradation of its mobile, broadband and fixed line services, with a chunk of the funds likely to be set apart for mobile segment, besides putting away Rs 100 crore (Rs 1 billion) in the war chest for acquisitions.

"We will invest Rs 2,298 crore (Rs 22.98 billion) in the next fiscal for expansion and upgradation of our services and out of this Rs 1,200 crore (Rs 12 billion) will go towards mobile services expansion", Anita Soni, director, finance, MTNL told PTI.

She said a part of this investment would also go towards the optical fibre cable project. The PSU is also eyeing to add another four lakh subscribers to its current 55 lakh subscribers by the end of this fiscal.

"We are expecting most of the new additions to come from mobile segment. We are also looking at adding more to our current five lakh capacity of broadband," Soni said.

MTNL will be seeing enough expansion of wireless telephony next fiscal as it plans to float tenders for 40 lakh (four million) GSM lines, out of which 25 per cent will be reserved for third generation mobile services.

The NYSE-listed major recently got additional spectrum from the department of telecom to expand its GSM based mobile service.

It got 1.8 Mhz+1.8 Mhz spectrum on 1,800 band to expand mobile services to its earlier 6.2+6.2 Mhz spectrum on 900 Mhz band. The additional spectrum would be more than just useful to MTNL as it has emerged as the fastest growing GSM operator in Delhi and Mumbai.

Since January this year, MTNL has doubled its GSM subscriber base in both these metros, the public sector operator has also garnered more subscribers than any of its private competitors.

The PSU is also preparing for the anticipated demand over the next two years. It is floating a four million GSM line tender - two million each for both its service areas Mumbai and Delhi.

In Delhi, the PSU plans to set up 40 more base towers over the next two months adding to the existing 430 towers.

In the last nine months, the PSU added 2.93 lakh cellular subscribers, officials said, adding MTNL's network in Delhi has 8.25 lakh subscribers capacity and with its current GSM cellular subscriber base at 6.59 lakh, it is planning to enhance the capacity to 10.5 lakh by March 2006.

By March 2007, the GSM network should have a capacity for 20 lakh subscribers, MTNL officials said.