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MTNL flags off New Delhi mobile service

Mahanagar Telephone Nigam Ltd (MTNL) has finally flagged off its long-awaited cellular service in New Delhi on Wednesday, marking the entry of a state-run firm into what has been a private sector preserve.

MTNL, which provides fixed line telephone services and Internet access in Bombay and New Delhi, announced its entry into the cellular business last month and followed it up by unveiling its tariff structure.

The move prompted existing private firms in New Delhi to cut their rates in a bid to hold on to market share. MTNL will be the third mobile service operator in the two cities.

The firm, which is due to launch its service in Bombay on February 28, will charge Rs 2.7 a minute for outgoing calls and Rs 1.5 a minute for incoming calls.

MTNL Chairman and Managing Director Narinder Sharma said the firm was initially targeting 100,000 customers each in the two cities.

Sources at MTNL said the firm planned to expand its network capacity to 225,000 in the second year of operations and 400,000 in the third year.

Sharma said the firm had already registered 10,000 customers in New Delhi and would start issuing connections from Thursday.

Sharma said the firm had invested Rs 1.6 billion to set up networks in the two cities.

MTNL bought its network equipment from global telecom equipment maker Lucent Technologies and Tata Infotech will supply the billing software. The firm, soon to be listed on the New York Stock Exchange, has launched its GSM mobile service under the Dolphin brand name.

S Sundaresan, MTNL's finance director, said the firm expected its mobile business to break even in the second year.

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