MTNL locked on upper circuit

MTNL is locked on the 10% upper circuit at Rs.15.32, with over 4 lakh pending buy orders on the counter. Just over a month ago, the company had hit a new 52-week low at Rs.9.71.

The stock hit the roof on reports that  MTNL is likely to sign a pact with PSU, BNNL today, which will allow both the companies to utilize each others network, to provide better pan-India mobile services. Geographical restrictions did not allow these PSUs to compete with private sector companies which have a pan-India presence. But with this collaboration now, hopefully, MTNL and BSNL will now be on a level playing field and increased services could mean better earnings.

MTNL provides services in Delhi and Mumbai while the rest of the country is covered by BSNL. Post this agreement, MTNL would avail the network of BSNL only for national roaming service for its subscribers except in Delhi and Mumbai. In the same way, BSNL will only use MTNL network for roaming services to its customers in Delhi and Mumbai. MTNL would offer all its NLD (national long distance) traffic to BSNL except for the traffic between Delhi and Mumbai.

Last week, MTNL had spiked up similarly on news that Group of Ministers (GoM), headed by Finance Minister P. Chidambaram, had decided to refund over Rs 11000 crore to MTNL and  BSNL for returning broadband wireless access (BWA) spectrum.