What this means is STD tariffs of MTNL will have the scope to come down in rest of the country.
Carriage charge is 70 per cent of the cost of STD tariffs of any NLD operator. BSNL is currently carrying the NLD traffic of MTNL for rest of the country. But with private operators willing to offer lower rates to MTNL, the NYSE listed company had asked BSNL to offer competitive price to retain the traffic routes.
MTNL has already issued a letter of intent to Reliance Communications Ventures Ltd for carrying its domestic long-distance traffic, other than between Delhi and Mumbai for those calls, which originate on MTNL and terminate on Reliance.
The agreement is being signed with the Anil Ambani company and the NLD project with Reliance will be implemented in phases.
When contacted, MTNL sources said, Reliance's bid was the lowest for the above specified type of calls and it is negotiating with BSNL to offer lower rates to carry NLD traffic, which do not terminate on Reliance for rest of the country and they have indicated to offer 'competitive' rates matching the private operators although they are yet to come up with the specific rate for the same.
MTNL sources declined to put a time-frame when the discussion with BSNL will come to logical end. We are progressing satisfactorily, they said.
Having bagged an NLD licence recently, MTNL has started carrying the traffic between Delhi and Mumbai itself on bandwidth leased from VSNL.
MTNL Chairman and Managing Director RSP Sinha had earlier said inviting bids is purely a commercial decision to get best rates for carrying and delivering our STD traffic.
MTNL's NLD traffic translated into business of about Rs 900 crore (Rs 9 billion) per annum for BSNL. On an average, BSNL charges 65 paise per minute for carrying MTNL's NLD traffic. And, MTNL found the rate steep, subsequently leading to its NLD tender.
Through competitive bids, MTNL wanted to save around Rs 400 crore (Rs 4 billion) per annum on carriage of NLD calls.
BSNL is the only operator providing connection to the remote areas of the country. In India, the total NLD business is worth around Rs 4,000 crore (Rs 40 billion) per annum, out of which Rs 1,000 crore (Rs 10 billion) is for the Delhi-Mumbai sector alone.
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