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DoT, MTNL draw strategy to preempt competition

Both DoT and MTNL also plan to introduce an instalment plan for telephone registration fee, drastically reduce shifting charges from Rs 600 to Rs 100 and enhance commissions of STD public call office operators.

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Other measures of the new tariff strategy include grant of interest on deposits received from STD PCO operators, allowing STD franchisees to have multiple connections, launch a massive marketing effort to introduce virtual calling card scheme in DoT circles through agents who will be paid commission.

DoT also proposes to provide prospective customers the flexibility to pay only a part of the initial registration fee of Rs 3,000 for non-OYT general connections.

Heads of telecom circles, to encourage telephone bookings, will allow customers the choice to pay a small payment at the time of registration with the balance amount collectible either in instalments or at the time of the first bill.

Shifting charges for intra-exchange shifts are proposed to be halved to Rs 300 from Rs 600, with inter-exchange shift charges being cut steeply to Rs 100 from Rs 600.

In addition, telecom circle heads have been given full powers to decide tariffs for value-added services like Internet, intelligent network IN) services, and voice mail among others.

DoT has set up a high-level committee headed by the senior DDG customer services, which comprises senior officers from the Telecom Commission and field offices.

The internal finance section of DoT has also provided inputs for the new tariff strategy. Sources said that the new tariff package was discussed in detail at the heads of telecom circles meet in the capital last week.

The sources said that the new tariff strategy was initiated after officials in the country's telecom establishment felt that inflexibility in tariffs would be a potential risk to DoT/MTNL.

"It would have meant that we are expected to combat competition with our hands tied," they said.

"DoT and MTNL are worried about losing high-paying customers in the event of a price war as the TRAI tariff order prescribes only the caps and gives individual operators the freedom to operate at different levels below the cap," said the sources.

They added that only a small percentage of customers are contributing a very large percentage of the revenue.

Indore and Bombay, where private operators Bharti Telecom and Hughes Ispat have started competing with the incumbent DoT/MTNL, are witnessing migration in the past one month.

Large corporate users have drawn up plans under which, they will retain some DoT/MTNL phone lines for incoming calls only, while making their outgoing calls from private operators' phone lines.

DoT and MTNL's price strategy is expected to face more competition in the days to come with private operators' services starting shortly in Gujarat and the Andhra Pradesh telecom circles.

There will be private sector competition in four circles and ultimately all over India, a phenomenon set to increase with the opening up of the national long-distance services on January 1, 2000.

- Compiled from the Indian media

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