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MTNL set to enter price war

01-September-2004
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MTNL set to enter price war

Price war in the telecom industry is all set to intensify further. While Bharat Sanchar Nigam Limited (BSNL) slashed tariffs last weekend, Mahanagar Telephone Nigam Ltd (MTNL) is planning to announce cuts in the next couple of days. MTNL aims to offer a competitive deal to its consumers in Delhi and Mumbai, the two cities where it is present.

MTNL is looking across all segments—cellular, fixed line and wireless in local loop (WLL) services. But, MTNL chairman and managing director RSP Sinha is more confident of price reduction on cellular (both pre-paid and post-paid) and fixed line services. “The new tariffs will be announced in a couple of days,” Mr Sinha told FE. Refusing to give a range of tariff cut, Mr Sinha said, “Our team is working it out. We will definitely be the lowest, in terms of our total service offering in both Delhi and Mumbai.”

Mr Sinha, however, pointed out that unlike BSNL, that has the advantage of being a national long distance (NLD) player, MTNL is just confined to Delhi and Mumbai.

There might be reductions in the subscribers trunk dialing (STD) or outstation calls too, he said. “We are also looking at offering more talk-time to our cellular customers for the same tariff,” he reiterated.

Last week, BSNL had slashed STD and cell tariffs by nearly a third. Making an outstation call from across BSNL networks (inter-circle and intra-circle) will get cheaper by 33 per cent from September 10. Cell tariffs were also slashed by 33 per cent for calls beyond the 500 km range, to any fixed network. BSNL local cell rates have dropped down to 60 per cent.

The fixed line subscriber base of BSNL is 35 million. Cell users number 7 million. BSNL had cut prepaid cellular charges (to any cellular network) for intra-circle (local) to Rs 0.90 per minute from Rs 2.20. This works out to a 60 per cent reduction. Pre-paid subcribers can now make calls to any fixed network at Rs 1.20 per minute, down from Rs 2.40.

BSNL also announced cuts for its post-paid cellular subscribers making intra-circle calls. Calls made by customers in post-paid plan 325 to any cellular network will be reduced by 42 per cent to Rs 0.80 per minute from Rs 1.40 earlier. Calls made by post-paid 325 customers to any fixed network will be charged up to 33 per cent less.

Meanwhile, having announced price cuts for pre-paid customers earlier, Airtel, earlier this week announced lower tariffs in the post-paid category. The company has announced a new plan: Airtel One-150, with a monthly rental of Rs 150. Under this plan, a local Airtel to Airtel call is now 50 per cent cheaper, while Airtel to Airtel STD call is 30 per cent cheaper. Private sector player Hutch had joined the price war earlier. It had announced a tariff cut for the post-paid segment last week. Others to announce price reductions on pre-paid include Reliance and Idea.

In the recent past, MTNL is the only telecom player, which has not slashed rates.

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