MTNL borrows from ICICI, Yes Bank to pay for BWA spectrum
State-owned MTNL on Tuesday said that it has raised funds from three banks -- ICICI Bank, Yes Bank and Central Bank of India -- to pay Rs 4,534 crore to the government towards broadband wireless spectrum.india Updated: Jun 22, 2010 20:05 IST
State-owned MTNL on Tuesday said that it has raised funds from three banks -- ICICI Bank, Yes Bank and Central Bank of India -- to pay Rs 4,534 crore to the government towards broadband wireless spectrum.
When contacted Anita Soni, Director (Finance), MTNL, confirmed that funds have been raised from these three banks.
She, however, did not elaborate on how much loan has been taken and what was MTNL's contribution from internal accruals towards BWA spectrum. Sources said that loans from banks make a substantial part of the payment.
This is MTNL's second loan in the last one month. On June one, the last date for making payment for 3G spectrum, the PSU had borrowed Rs 2,500 crore from Axis Bank, out of the Rs 6,564 crore total fee.
MTNL operates in Delhi and Mumbai and was given 3G and BWA spectrum about a year ago on the condition that the PSU would pay as per the final bid in the auction, that ended on May 19 for 3G and June 11 for BWA.
Delhi and Mumbai were the costliest circles as the bid for Delhi was Rs 3,316.93 crore and that for Mumbai was Rs 3,247.07 crore against the reserve price of Rs 320 crore each for both the metros in case of 3G.
Similarly for BWA, Delhi and Mumbai saw the highest bids at Rs 2,241.02 and 2,292.95 crore respectively.
MTNL has already launched 3G mobile services.
MTNL, along with BSNL that operates in rest of India, were given spectrum in advance in view of tendering obligations involved with the PSUs.
The PSU is facing tough times due to stiff competition and lower tariffs. Its loss for the fourth quarter widened as costs rose and revenue from basic and cellular services fell.
The company posted a loss of Rs 1,574 crore for the January-March period, compared with a loss of Rs 73 crore a year earlier. Total sales also fell to Rs 848 crore.
Its costs more than doubled to Rs 3,719 crore because of higher personnel and retirement-benefit expenses.
Last month, it got a tax relief of Rs 385 crore and in March it had got another refund of Rs 1,400 crore.