State-run Mahanagar Telecom Nigam Ltd has received the national long distance license from the government, a development that has the potential to start a fresh bout of cuts in STD rates, starting with Delhi and Mumbai, two of the most lucrative telecom markets in the country.
"We have received the NLD licence and currently we are busy preparing the cost structure for our STD service between Delhi and Mumbai. There has been no decision taken yet on how to carry the traffic in rest of India. We are discussing with BSNL on getting a competitive rate (carriage charge). Otherwise we will look at other options where we can get competitive rates," Anita Soni, director (finance), MTNL, said.
Possessing its own NLD licence could save MTNL up to Rs 400 crore (Rs 4 billion) when it begins carrying its own traffic. The PSU expects to start a STD service soon.
Asked whether MTNL is negotiating with BSNL for a lower carriage charge from the current 65 paise a minute, she said: "We want a competitive rate."
Soni said the PSU was going to focus on increasing traffic between Delhi and Mumbai on its own network and for that it wants a 'competitive rate' for the rest of the country which it should clear in 2-3 days.
If MTNL is looking at offering local call rates between Delhi and Mumbai riding on its own network, she said 'cost structure is being worked out and it is premature to say anything on this.'
Soni declined to comment on the controversy where MTNL is accused of not paying STD traffic charges to BSNL.
Local call rates which could be less than a rupee (in case of own network) or Rs 1 a minute will further intensify the tariff war in Mumbai and Delhi where private operators are charging Rs 2.65 a minute and MTNL is charging Rs 2.40 a minute.
Armed with an NLD licence, MTNL would have the edge as operating in the cream metros like Delhi and Mumbai will strengthen its bargaining position with BSNL to offer a lower carriage charge (less than 65 paise) for rest of the country which will also help MTNL reduce its STD rates to rest of the country as well.
The market, however, did not react to the news as MTNL shares after reaching a high of Rs 222.90, was trading at Rs 219.50, up Rs 1 from Monday's price.
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