The Hindu Business Line : Delhi-Mumbai calls at 40 paise a minute

DELHI- MUMBAI CALLS AT 40 P: Mr Dayanidhi Maran , Minister of Communication & Information Technology, and Mr. R.S.P. Sinha, Chairman and Managing Director, MTNL, at a press conference announcing the lowered tariffs for calls between Mumbai and New Delhi, in the Capital on Tuesday.

New Delhi , May 23

In a move that could trigger a fresh round of price war in the long distance telephony segment, the state-owned Mahanagar Telephone Nigam Ltd (MTNL) on Tuesday dropped STD charges between Delhi and Mumbai to local tariff at Rs 1.20 for a three-minute call. The move will benefit MTNL's 38 lakh fixed line subscribers, who at present pay Rs 1.90 per minute for a Delhi-Mumbai call. The new rates will come into effect from June 1.

The drop in tariffs is a result of a tie-up with Videsh Sanchar Nigam Ltd (VSNL) for leasing out national long distance infrastructure. Until now, MTNL routed its STD traffic between Delhi and Mumbai through Bharat Sanchar Nigam Ltd's network.

Additional revenue

While the move is good news for Tata-managed VSNL, which will get additional revenues from carrying 12 million minutes of STD traffic generated by MTNL subscribers every year between Delhi and Mumbai, BSNL will stand to loose out on this lucrative sector. MTNL said that it was paying huge carriage charges to BSNL, and, therefore, decided to partner with VSNL, which was offering better commercial terms. MTNL is expected to save Rs 12 crore a year as a result of its partnership with VSNL in comparison to the cost incurred, while routing the STD calls through BSNL. MTNL has also floated a tender for other sectors across the country.

More reduction

Mr R.S.P. Sinha, Chairman and Managing Director, MTNL, said that competition in the bandwidth segment will result in further reduction in tariffs. Today's announcement from MTNL is expected to prompt other operators to follow suit.

Intense competition

Announcing the new tariff, the Communication and IT Minister, Mr Dayanidhi Maran, said that competition in the long distance segment will further intensify with 15 companies expressing interest to take an NLD licence and six companies seeking an ILD licence.

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