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MTNL offers Delhi-Mumbai calls for a song

MTNL has announced that it will charge its landline customers a mere Rs 1.20 for a three-minute call.

india Updated: May 23, 2006 17:01 IST
Press Trust of India
Press Trust of India

Unleashing a fresh round of price war in the long distance call segment, state-owned MTNL on Tuesday announced it would charge its landline customers a mere Rs 1.20 for a three-minute call between Delhi and Mumbai.

The rate for calls between the two cities, which are 1,400 km apart, would come into effect from June 1, MTNL CMD RSP Sinha announced in the presence of Communications and IT Minister Dayanidhi Maran.

MTNL currently charges Rs 1.90 a minute for a call between Delhi and Mumbai thereby bringing down rates nearly by 375 per cent and the new tariff is comparable to local call rates.

The other telecom PSU BSNL charges about Rs 2.40 a minute for STD calls throughout India, except between Delhi-Mumbai, while private operators charge up to Rs 2.65 a minute.

Other operators are expected to follow suit to remain competitive in the lucrative Delhi-Mumbai market.

MTNL, which has licence to operate only in the metros of Delhi and Mumbai, has 38 lakh fixed line users in both these cities put together.

Maran said this is an effect of policy decision by Department of Telecom to bring down the licence fee for NLD and ILD to a uniform Rs 2.5 crore from Rs 25 and Rs 100 crore, respectively.

MTNL, which launched its own STD operations between Delhi and Mumbai on Tuesday, has tied up with Tatas-owned VSNL for traffic carriage based on the lowest rates offered by VSNL.

"MTNL has been paying huge carriage charges for its calls routed outside Delhi and Mumbai. By tying up with VSNL we shall be buying huge bandwidth capacity (4 STM1s) at a cost of Rs 2.64 crore annually thereby saving Rs 8-10 crore on cost," MTNL Director (Finance) Anita Soni said.

Maran said that DoT has received as many as 16 applications for NLD licenses and two companies have been issued letter of intent, while MTNL was given the licence.

Railtel and Power Grid have been given the LoI, the minister said, adding that six companies have applied for ISD licences.

According to figures released by MTNL, the company earns between Rs 100-150 crore revenue from STD calls between Delhi and Mumbai which registers about 12 crore STD minutes with 80 per cent of them made from fixed line phones.

MTNL is also setting up its own infrastructure on viable routes in a phased manner and for rest of the country it has invited bids from traffic carriers like Bharti, VSNL, Reliance and BSNL and traffic would be routed based on lowest carriage charges.

The companies would be submitting the bids by this evening and tomorrow MTNL would be opening the bids.

First Published: May 23, 2006 13:01 IST