Bsnl, Mtnl Fracas: Who Stands To Lose?

[Arun 795]

BSNL, MTNL fracas: Who stands to lose?

- Press Trust of India

May 08, 2006 17:49 IST

State-run Mahanagar Telephone Nigam Limited may stand to lose two of its exclusive mobile service offerings -- seamless connectivity and free roaming with BSNL -- if it moves to other private players for carrying its STD traffic, saving a few billions in the process.

A senior BSNL official said it would not be easy for MTNL to get the all-India connectivity if it moves away from BSNL as none of the private NLD operators have the network reach to match BSNL and eventually these private players would have to turn to BSNL to carry NLD traffic of MTNL to reach each corner of the country.

BSNL may decide not to carry these private players voice traffic at that time. In any case BSNL does not have any roaming agreement with private players.

Currently Reliance Communication Ventures, VSNL and Bharti are the NLD licencees apart from BSNL.

Stating that even if over 95 per cent of the calls that MTNL generates are terminated in cities and towns where even other LD players have networks, the real problem will start when MTNL subscribers move outside these two metros to remote areas.

BSNL officials said though the value of carrying MTNL's NLD traffic is about Rs 1200 crore (Rs 12 billion), BSNL actually gets much less than that as the PSU does not pay upfront the entire amount.

BSNL carries both basic and cellular long distance traffic for MTNL.

When contacted, BSNL CMD A K Sinha declined to comment on what MTNL will stand to lose out by snapping the NLD ties with BSNL but said, "I have come to know of it from the media reports and have asked my officials to check on it.

"Whatever it is, we will consider it in totality. At this stage, we can't comment on anything".

MTNL CMD R S P Sinha was unavaliable for comment.

MTNL officials admitted that the most vital features -- seamless connectivity and free roaming -- would be lost if BSNL does not carry the NLD traffic of BSNL.

Three years ago, BSNL and MTNL decided for a seamless roaming between the two networks to ensure smooth mobility and connectivity to their cellular subscribers accross the country without any roaming charges.

MTNL is the incumbent telecom service provider in Delhi and Mumbai. The company doesn't have its own NLD network. BSNL is the incumbent telecom service provider for the rest of the country.

BSNL is the NLD carrier for MTNL. MTNL pays 65 paise a minute for carrying NLD traffic to BSNL. MTNL itself has applied for a NLD licence from DoT and is believed to have got in-principle approval for it. But it still has not got the licence.