Mtnl Set To Bag Chennai Telecom Circle

State-run Mahanagar Telephone Nigam Ltd (MTNL) is close to bagging the Chennai telecom circle to add to its existing circles of Mumbai and Delhi.

Top sources in the ministry of telecommunications said talks are in final stages and a decision will be taken soon. The Tamil Nadu government, MTNL and the Department of Telecom are the main participants.

"Only the valuation of fixed assets is remaining, and once this is over, then MTNL would takeover Chennai from DoT," ministry sources added. Sushma Swaraj, the minister for communications is expected to decide.

The addition of Chennai circle would be a boost for MTNL, which has been looking to expand its base to pre-empt competition from private and foreign players. Mumbai and Delhi are the country's biggest circles. Chennai is also fairly large, and its teledensity is lower leaving much scope for growth.

 

Several reports proposing corporatisation of DoT had recommended that MTNL take over both Calcutta and Chennai circles. While Calcutta has teledensity (number of lines per 100 persons) of nearly 4, in Chennai it is around 8.38. In Mumbai, the teledensity has reached 13.27.

Under the new MTNL chief, S Rajagopalan, who has adopted rapid deployment of telephone lines, Chennai is likely to see see reduction in waiting periods and improvement in operational efficiencies.

It would provide a major boost to MTNL, which is also planning a cellular foray. Calcutta and Chennai have extremely low penetration rates.

While the teledensity (no of telephones per 100 persons) in Tamil Nadu is around 1.4. The demand is expected at the rate of 16.6 per cent per annum till 2005, while in Chennai it is expected to grow at 10.9 per cent per annum.

MTNl may have a similar interconnect agreement with DoT as it has Mumbai and Delhi _ 25 percent of all outgoing revenue, 100 per cent of rentals and no revenue for incoming calls.