MTNL rings loud

MTNL is ringing loud today morning. The stock, which had closed at Rs.15.35, opened at Rs.15.75 and is currently up almost 4.5% at Rs.16 levels. Volumes are high at 15 lakh shares.

The PSU telecom company has zoomed up after the Group of Ministers (GoM), headed by Finance Minister P. Chidambaram, decided to refund over Rs.11,000 crore to BSNL and MTNL,  for returning broadband wireless access (BWA) spectrum. Both these companies had returned the airwaves as the price they had paid for getting the spectrum had depleted their cash reserves. In 2010, BSNL had paid Rs.6500 crore and MTNL Rs.4500 crore. This is a good move not only will this cash back help these companies shore up their reserves and the Govt will get additional spectrum which it can auction and help earn revenue. Hopefully, this will now help MTNL return back to the black.