MTNL look forward for Saudi mobile JV

NEW DELHI: State-run MTNL, which is one of the nine bidders in fray for Saudi Arabia’s third mobile license, on Tuesday said it will be keen on the management control in the joint venture company if it wins the bid.

MTNL CMD RSP Sinha did not disclose the amount at which the PSU has bid for the licence saying it has bid ‘aggressively’. Decisions on the mobile bids are expected in the next three weeks, while the PSU also plans to bid for the fixed line licence.

He said if MTNL wins the bid it would like to have management control of the JV firm, which it will form with its local partner Al Shoulam by picking up maximum stake with the available 50% to both the partners.

“As per the Saudi regulations, any partner which is going to bid has to take minimum 15% stake and there is a lock-in period of five years during which the partner can not come out of the venture. Over and above that, 50% of the company has to be floated in the market for the public that leaves a maximum of 50% for either of the partners to share between themselves.”

He said a decision will be taken in the next 2-3 weeks on the bids. Giving a valuation game of the Saudi market, he said, in Saudi Arabia teledensity is not over 50. The second mobile licence, which was given at $3 billion, the market cap went up to $16-17 billion although they do not have huge numbers.

“We get the feeling that Saudi is going to open up in a big way like Dubai and the Middle East,” Sinha said adding MTNL would go with the same partner if it decides to bid for the fixed license in Saudi Arabia.

MTNL recently lost to Reliance Communications in Kenya mobile licence, which had bid at $111 million against MTNL’s $51 million. Sinha said for MTNL, the geographies for expansion include underdeveloped, semi developed markets and some of the Middle East, African and CIS countries.

On its other plans, which include a submarine cable project jointly with BSNL, he said both the partners are currently talking to various countries like Singapore, Malaysia, Saudi Arabia and Behrain to finalise the landing stations for the Millennium Telecom project.