MTNL hopes to cash in with pre-paid 3G services

To get more users for its third generation mobile services, state-run Mahanagar Telephone Nigam Ltd, which provides telephony services in Mumbai and Delhi, launched a pre-paid option that will enable customers to experience high-speed data connectivity at an affordable price.

MTNL had launched its 3G services in January but has only 400 subscribers till now. The pre-paid option is expected to drive up the demand for the company. R S P Sinha, Chairman and Managing Director, MTNL, said he expected 200,000-300,000 3G users within the first year of operations.

The 3G pre-paid services are available at Rs300 with lifetime validity, enabling a customer to make local video calls at Rs1.8 a minute to other MTNL 3G phones. For other networks, it is Rs 3 a minute. Domestic long distance video calls are priced at Rs 3.75 a minute and ISD video calls are charged at Rs 30 a minute. Data download will cost Rs3 per MB.

In addition the Rs300 initial fee, a subscriber will have to buy data coupons priced between Rs99 and Rs2,500 coupons. MTNL has bundled free data download of 50 MB with the trial coupon of Rs99.

The public sector undertaking will add new capacity to accommodate 800,000 users. Since 95 per cent of existing mobile users are on pre-paid, MTNL expects more demand for this type of 3G service, which Sinha said has given an advantage to the state-run company over private players.

MTNL and BSNL, the other state-run telephony provider, are the only operators to have got spectrum for offering 3G services. MTNL was the first company to launch its 3G services in the country in December 2008, after the government gave state-owned operators 3G spectrum ahead of private operators, who are still waiting for the auction of 3G spectrum to start their operations in this space.

''We have invested an incremental amount of Rs 500 crore for our 3G services. We hope to recover our costs in the next year or two,'' Sinha said. The company launched its 3G services in Mumbai last month and will introduce its pre-paid offer in the city by next week.

Along with this service, MTNL has focussed on the trend of extensively higher data usage. A 3.5G connection bundled with Micromax HSDPA datacard at Rs 3,500 prepaid, and a monthly 2GB free data download for two months, is now available.

Apart from this, MTNL also announced the launch of roaming facility to its CDMA Garuda post-paid subscribers between Delhi and Mumbai. The facilities include no roaming charges, free incoming calls while roaming, etc.