MTNL plans new arm for Net

NEW DELHI, AUG 13: Faced with stiff competition from private internet providers, state-owned Mahanagar Telephone Nigam Limited MTNL has...

NEW DELHI, AUG 13: Faced with stiff competition from private internet providers, state-owned Mahanagar Telephone Nigam Limited MTNL has asked the government to allow it a separate subsidiary to deal with internet business.

The company, which wants the subsidiary to be operational by November, felt that a wholly-owned subsidiary would bring in more efficiency in its internet operations.

quot;We are in the process of setting up a fully-owned subsidiary since it will give a lot of flexibility to the company8217;s internet operations,quot; chairman and managing director of MTNL S Rajagopalan, told PTI.

The company has written to the government recently after the board of directors felt that setting up a subsidiary would help the company to grow at a better pace in the fast-growing internet business, Rajagoplan said.

quot;The company expects an early nod from the government as it feels any delay to go ahead with the move would prove very costly for MTNL,quot; company sources said.

He said the revenues of the subsidiarywould be part of the balance sheet of the company since it was a wholly-owned subsidiary and as such there were no moves to delink it from the parent company.

MTNL entered internet business early this year, but has been facing stiff competition from Videsh Sanchar Nigam VSNL and private players such as Satyam, Bharti-BT and Dishnet.

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Entry of MTNL has kicked off a tariff war in the segment with every player reviewing internet charges quarterly. Despite being a traditional telecom player, MTNL has begun generating sizeable income from the segment and has launched a website for content provision, quot;Bharat-Onlinequot;, which it feel would generate large volume of business.

MTNL had last month come out with a new scheme to widen its internet subscriber base by offering telephone connection along with an internet subscription without charging any registration fee in advance, but levied as a deferred payment.

MTNL had slashed its internet subscription charges on July 6 last by 15 per cent keeping in tune withthe industry trend, in order to gain a sizeable market at its operational areas of Mumbai and Delhi. The company had fixed a new slab of 30 hours costing Rs 500 per month with a condition that it should be availed every day, but with an additional per hour charge of Rs 10.

It had also brought down the 100-hour subscription rate from Rs 2,550 to Rs 2,150 with a renewal charge of Rs 2,050.