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MTNL to cut Net-access rates further

Indian state-owned telephone company and Internet service provider Mahanagar Telephone Nigam Limited, or MTNL, plans to slash Internet access rates as part of a "competitive price" strategy, officials said on Monday.

"Our new rates will be announced anytime now. Our prices will be competitive. Many changes are being planned," spokesman George Mathews told

Reports on Monday quoted MTNL chairman S. Rajagopalan saying the company would announce its new Internet package this week.

"We follow a strategy of lowering tariffs every three months. We are aiming at bringing down the tariffs to the price which is comparable to what consumers pay for a cable television connection," Rajagopalan said.

India's oldest and biggest Internet service provider, the state telecom company Videsh Sanchar Nigam Limited, or VSNL, last week halved rates from 1,500 rupees (39 dollars) for 100 hours to ward off increasing competition.

VSNL said the offer would be valid during June.

Mathews said the MTNL price cutting was "not in reaction to the VSNL package. We have been drawing up a fresh package for some time.

"In this line of business you cannot have a fixed strategy and we have to be doing this fast to match the market."

Mathews said MTNL was looking at "coming out strongly with high bandwidth Internet access packages that can be provided and supported through leased lines.

"Dial-up Internet access on low bandwidth is not going to be a very lucrative area."

More than 60 private Internet providers have entered the fray since the monopoly of VSNL was lifted in December 1998.

India's base of Internet subscribers has risen four-fold to 1.1 million from about 250,000 in 1998.

Packages for net surfing, which used to cost up to Rs 15,000 for 500 hours, have fallen to about Rs 1,500 for 100 hours.