Now, Tata phones at Rs 770

Tata Teleservices Maharashtra Ltd has begun offering handsets at Rs 770 ($19) each, slightly cheaper than larger rival Reliance Communications Ltd., to increase users.

The company, which operates networks based on code division multiple access, or CDMA, technology in two of the 23 zones that make up India's telecommunications market, has more than 3 million users.

Tata Teleservices Maharashtra is a unit of unlisted Tata Teleservices, the phone services arm of the $22 billion Tata Group.

"We expect a huge increase in terms of revenue and a huge increase in the subscriber base as well,'' Ramesh Iyer, vice president for sales at Tata Teleservices Maharashtra, told reporters in Mumbai. He declined to elaborate.

Handset prices below Rs 1,000 would encourage users in the nation's rural areas to begin using wireless services. While more than 6 million new users are being added each month, mobile usage is 17 per cent in the country of 1.1 billion people.

Reliance Communications, India's second-largest mobile-phone services company, began offering handsets priced at Rs 777 on May 2 to attract lower-income users in the world's fastest-growing wireless services market.

Tata Teleservices Maharashtra is sourcing these handsets from Motorola Inc, the world's second-largest maker of mobile phones.

While many retailers sell recycled handsets at below Rs 1,000, they're unable to offer adequate support and after-sales service to buyers.