MTNL plans low tariff cell phone

"Ideally there should be no difference in charges for basic telephone (wireline) and cellular (wireless) services, other than some margin for airtime in case of the latter," he said and claimed that low-tariff would not stand in the way of profitability of MTNL.

"By keeping low tariff for cellular services, MTNL can still make profits through an expanded subscriber base," Rajagopalan asserted. Though the MTNL chief did not outline the tariff for the new venture, it is pertinent to note that a three-minute call costs Rs 1.40 on wireline as against a maximum of Rs 16.80 per minute for a cellular call. With MTNL also contemplating no charge for in-coming calls on cell phones, the company’s entry into the cellular sector is expected to trigger tariff reduction by other operators.

Questioning the logic for charging in-coming calls as well as other value-added services like caller line identification (CLI), the MTNL chief said high volume, low tariff strategy was best for a country like India adding that it would stimulate exponential growth in the cellular market countrywide.

Meanwhile, the company is in the process of finalising the joint venture partner for its cellular network which is likely to be GSM 9000 (Global Standard for Mobile Communication). "MTNL is looking for an experienced international partner for its foray into cellular services," he said and clarified that the majority stake (51%) would be with MTNL.