Atleast three telecom companies are looking to enter Mumbai. That makes Essar-owned BPL Mumbai, a rather precious asset. CNBC-TV18 reports that Essar is looking to sell the circle while Mumbai is hot.

Idea has been waiting to get into Mumbai for over six months. It has a license but no spectrum. Maybe BPL Mumbai can solve its problems. The Birla Group owned telecom company is just one contender. Reliance Communication, Maxis owned Aircel and Spice Tele are also said to be eyeing BPL Mumbai.

The circle was bought by Essar in July 2005, with the intention of merging it with Hutch Essar. But after a long dispute with first Hutch and now Vodafone, its ownership is yet to be decided via arbitration. Essar, though is believed to be looking for buyers.

Sources say BPL Mumbai, with its 10.6 lakh subscribers, could bring in over Rs 2,000 crores. Essar had paid Rs 1,700 crores, which is Rs 13,000 per subscriber. But telcos, for whom Mumbai is out of reach, may be willing to pay upto Rs 20,000.  

A sale seems most likely at this point, as trying to merge BPL Mumbai with Vodafone Essar, might prove counterproductive. The spectrum policy does not allow a single entity to own more than 15 megahertz of spectrum in a circle. 

Since Vodafone Essar is already present in Mumbai, it may have to return some of BPL's spectrum. Essar would gain more from selling the circle to a third party. Essar officials denied being in talks with any players. They maintained that till the spectrum issue is not sorted out, they will not merge BPL into the joint venture. Hutch also refused to comment.

CNBC-TV18 Disclaimer

This information is source-based and has not been provided to the stock-exchanges.