MTNL rings in cheaper mobile phone era

MTNL rings in cheaper mobile phone era
ENS ECONOMIC BUREAU

MUMBAI, JAN 12: Launching a rate war in the cellular phone segment, Mahanagar Telephone Nigam Ltd (MTNL) has decided to offer its cellular services at Rs 1.50 per minute for incoming calls and Rs 2.70 per minute for outgoing calls. When compared to Rs four per minute charged by private operators like BPL or Orange in the metropolis, the MTNL rate would turn out to be much cheaper and threatens to trigger a rate war.

Addressing a news conference here today, Communications Minister Ram Vilas Paswan said the Telephone Regulatory Authority of India (TRAI) has fixed the rates, which are much cheaper than the tariff offered by private cellular operators. While mobile phone users are expecting the tariffs of private operators to fall in line with the MTNL rates, private mobile operators refused to comment on the their plans. "Give us some time... we've nothing to say now," said a spokesperson of Hutchison Max.

Airtel, private cellular operator in Delhi, said it would match its tariffs with MTNL's tariff. Terming mtnl's tariff plan as aggressive, Airtel's chief executive officer Sanjay Kapoor said that "we will make our tariff comparative to MTNL's but we will not adopt a strategy to match our tariffs penny-by-penny."

In Mumbai, the cellular services will start from February 28 and the booking for it will start from February 15. Initially, one lakh connections would be provided on first come first serve basis and in the second phase, three lakh connections would be given, the minister informed. One-third connections would be reserved for women and the rent charged would be Rs 400 while the registration fees would be announced soon, he said.

``Lakhs of people travel by local trains every day in Mumbai. It's they who need the cell phones to keep in touch with their family and offices. I want them, especially working women, to get a cheap cell phone,'' MTNL's former chairman S Rajagopalan had told this newspaper. MTNL's cellular foray is considered to be his plan.

Voice mail services would be provided free to all customers. In Delhi, the cellular services would begin from January 26. With this, the subscribers to the GSM cellular services would find it much cheaper than those currently available in the market.

MTNL would provide customised internet services through Wireless Access Protocol (WAP). MTNL officials say the tariffs for the services would be heavily discounted as compared to other cellular operators. "Mobile phone service would be internet compatible and carry features like messaging and wireless application protocol," said S Ramani Iyer, chief general manager (Mumbai), MTNL.

Also the Department of Telecom (DoT) has extended the MTNL's cellular coverage to New Mumbai and Kalyan. In Delhi, the services would be provided in Gurgaon, Noida, Ghaziabad and Faridabad.

MTNL Delhi CGM K H Khan said "DOT has met a long-pending demand of ours. This will equip us to fight the private operators." MTNL is providing cellular services through CDMA technology which is almost at par with basic phone tariff. MTNL has decided to launch the service as third operator in Delhi and Mumbai.

However, the proposed Wireless Local Loop (WLL) mobile service is likely to put a spanner in the works of mobile companies. "Basic telephony providers have been permitted to start the proposed service within local areas spanning a city or two. As and when this service starts, it will threaten the very existence of the cellular operators in cities," said an analyst.

Currently, cell phone companies derive nearly 40 per cent of their total revenues from cities. Their rates are about Rs 3-Rs 4 per minute for incoming and outgoing calls, whereas the WLL rates are almost on a par with basic telephony rates.

Hutchison Max is currently the leader in mobile phone segment with a subscriber base of 5.78 lakh connections, followed by BPL with 5.74 connections. The total number of mobile phone subscribers in the country has crossed the 30 lakh mark.