Mtnl Plans To Launch Mobile Telephony Services

ASIA TELECOM 97 concludes with high hopes for sectoral growth

Mahanagar Telephone Nigam Ltd (MTNL) is planning to start mobile telephony services in Delhi and Mumbai, the two cities it operates basic telecom and data services.

MTNL chairman and managing director N Rajagopalan on Thursday expressed hopes to operationalise the service under a joint venture in a years time.

The MTNL chief said that the PSU was studying both Japanese personal communications service (PCS) technologies which operate on the 1.9 giga hertz frequency band and code division multiple access (CDMA)-based systems. Both the Japanese and North American CDMA is a product being aggressively sold by US companies systems work out cheaper than GSM (groupe special mobile, a digital cellular standard developed by European telecom companies) systems.

 

Provision of mobile telephony services has been one of the objectives of Delhi MTNL. In fact, in the cellular telecom services tender for Delhi, Mumbai, Calcutta and Chennai and in the tender in January 1995 for the cellular circles the department of telecommunications (DoT) had made it clear that it reserves the right to enter the cellular services market. The MTNL move to offer such services within a year is a realisation belated, though of that intent.

The modalities of operating mobile telephony services have not been worked out. For instance, the issue of the amount of licence fees (if any) that MTNL would pay DoT has not been worked out. Cellular operators in Delhi and Mumbai pay the department Rs 2 crore, Rs 4 crore and Rs 8 crore, respectively, in each of the first three years of operation. From the fourth year of operation, they will have to pay Rs 5,000 per subscriber a year as licence fees.

The factors driving MTNL into the mobile telephony market are several, primarily the cash flows and huge potential profitability in the business. We have been advised that we should the whole range of telecom services. This will increase our (scrip) value, Rajagopalan said.

The Disinvestment Commission has advised the government to offload 10 per cent of the 80 per cent equity stake it holds in MTNL.