Mahanagar Telecom Nigam Ltd will start its broadband services in Delhi from January next year and will bundle the broadband connection with its telephone service in which local calls will be free to the subscriber.

"We have placed the purchase order for broadband with the vendors and will start the service from January. We are creating a capacity of 350,000 lines distributed 50:50 between Mumbai and Delhi. We are targeting 100,000 broadband subscribers in both Delhi and Mumbai with 50,000 each in the metros," R S P Sinha, CMD, MTNL, told newspersons here on the sidelines of a function.

He said MTNL is planning to charge a composite monthly payment where the local calls may be free.

"We have a plan doing away with the local call charges. We may charge a lump sum amount which may include cost of both the local call and broadband charges," he said, adding that MTNL is already offering the lowest tariff in call rates and the same can be expected in broadband also.

MTNL will invest Rs 200 crore (Rs 2 billion) in its broadband initiative which will be spent over the period till December.

Ericsson will provide the equipment for broadband. The PSU is targeting a broadband subscriber base of 10 lakh (1 million) by December 2005 and out of that it expects 500,000 each in Mumbai and Delhi.

Sinha expects that by January-end MTNL would be able to offer high-speed Internet access. "After meeting the minimum broadband speed of 256 kbps for broadband, he said the maximum speed can go up to 20 Mbps," he said.