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MTNL sets Rs 2.70 per minute for mobile call

The Mahanagar Telephone Nigam Ltd on Monday announced its new cellular service will charge over a quarter less than existing private operators.

MTNL, a fixed-line telephone and Internet access service provider in Delhi and Bombay, will charge Rs 2.7 per minute on outgoing calls, Communications Minister Ram Vilas Paswan told a news conference.

This compares to Rs 4 per minute charged by private operators in Delhi, and about Rs 3 per minute by those in Bombay.

Incoming calls will be charged Rs 1.5 a minute, he said.

Paswan said MTNL would start enrolling subscribers in Delhi on January 15 and would launch cellular services there on January 26.

In Bombay, it will begin registering subscribers on February 15 and begin mobile service there on February 28.

Monthly rentals would be Rs 400, he said.

"We expect 300 minutes usage per customer per month," a senior MTNL official said.

MTNL has the capacity to service 100,000 subscribers each in Delhi and Bombay. Paswan said one-third of MTNL's connections would be reserved for women.

At the end of November, Delhi had over 433,000 cellphone subscribers divided between the two cellular firms Bharati Cellular and Sterling Cellular. Bombay had about 462,500 cellphone users split between BPL Mobile and Hutchison Max.

"The proposed tariff should give MTNL an EBITDA (earnings before interest, tax, depreciation and amortisation) margin of 40 per cent," an analyst at a foreign brokerage said.

MTNL shares on Friday closed 1.66 per cent higher at Rs 187.05 ahead of the announcement. The Sensex gained 0.23 per cent.

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