Although 3G will be put out to tender, telecom licences will not be permitted in either location. There is also the question of what percentage of the revenue obtained by the 3G tenderers will be retained by MTNL.
As Developing Telecoms has previously mentioned, initial take-up of 3G in India has been disappointing, one recent estimate being a mere 1,000 customers for MTNL’s 3G offering. BSNL and MTNL were both granted 3G spectrums so that they could provide high-speed Internet and video-conferencing.
In fact, MTNL has said that it will ensure 100,000 customers for both New Delhi and Mumbai in the first year. In the second year both cities will offer 300,000 customers and in the third it will have climbed to 500,000.
For all that, do not all rush. MTNL is setting its own conditions for those wishing to tender. Any company that is successful must be subject to a review after three of the ten years have elapsed. In addition, they must already have accumulated 1 million customers in two countries before even bidding. And if that is not enough, the lucky bidder will have had to have received revenues of US$310 million in each of those two countries for each of the last two years.
Once you actually do get operating in 3G in either city, the target is US$6 million in the first year, US$25 million in the second year and US$50 million in the third year. Do not run a shortfall as you will be penalised for 10% of that shortfall.
And be quick about it as you have until September 9 to get your bid in.
According to the MTNL website, the intention is to attract proposals from organisations that are strong enough financially to qualify as tenderers, who can manage and develop a customer base in every sense, and who can sell and market 3G.