Landline STD rates between Delhi and Mumbai may fall soon. The reason: at long last, state-run telecom firm MTNL, which operates in Delhi and Mumbai, has finally received the letter of intent (LoI) from the government to operate national long distance license (NLD) services.

LoI is expected to be converted to full licence soon, bringing in more competition in the STD sector. When MTNL's STD services are operational in a few weeks, it may lead to cut in STD rates between the two cities, although it is not clear by how much.

A senior official told ToI that landline STD rates between the two cities should fall to about Rs 1.60-1.80 a minute from about Rs 2.40 as of now.

But it could be a while before MTNL is able to offer the services nationwide. The company is not likely to set up its own nationwide network to offer STD services.

So, it needs to tie up with other phone operators who have nationwide networks and enter into interconnect pacts with various companies before it can make any meaningful impact on the country's STD tariffs and traffic patterns.

MTNL will compete with another state-owned firm BSNL and private operators like Bharti and Reliance who have national presence and operate STD services.

At the same time, it will lease their networks to carry traffic. In such a situation it is unlikely that with just about six million customers (as against 20-60 million subscribers each for these operators), MTNL will be able to better tariffs considerably.

But for Delhi and Mumbai, where BSNL does not offer services, it could negotiate good interconnect rates. MTNL's LoI comes at a time when it is fighting with BSNL over carriage rates between Delhi and Mumbai.

MTNL has threatened to go to other private operators leaving BSNL with big losses on this lucrative route. In fact, DoT secretary JS Sarma has asked the two on Tuesday to settle their differences and meet him again on Wednesday.

MTNL finance director Anita Soni told PTI, "We have received the licence and we are busy preparing the cost structure for STD service between Delhi and Mumbai... and there has been no decision taken yet on how to carry the traffic in rest of India... we are discussing with BSNL on getting a competitive rate (carriage charge).

Otherwise we are looking at various other options where we can get competitive rates."

(www.tmcnet.com)