The Hindu Business Line : MTNL bets on speed, price to penetrate broadband market

DESPITE its relatively late entry into the broadband market last week, Mahanagar Telephone Nigam Ltd (MTNL) is betting on its existing base of 23 lakh telephone lines and its affordable pricing to make a breakthrough in this segment in the city.

A large chunk of the high-end retail market in the city is already served by several cable broadband players such as Hathway, Pacenet and Iqara (a division of British Gas), not to mention larger players such as Videsh Sanchar Nigam Ltd, which is gradually adding localities in the city to its broadband service net.

But Mr Kuldeep Goyal, Executive Director, MTNL, Mumbai, said it was only a matter of time and MTNL will outpace its rivals in covering territory. "MTNL's broadband rollout is going to happen in three phases over the next three months and will cover 150 exchange areas, at a rate of 50 exchanges every month," he said.

Since MTNL's broadband service is going to be based on ADSL-2 technology, which sits on copper wire providing MTNL's basic telephony services, the rollout can proceed at a robust phase.

"Those who are laying optical fibre networks for broadband or are entering into arrangements with cable operators would find it expensive, tedious or both; we are not hampered by either," said Mr Goyal.

Moreover, MTNL will provide Internet access speeds starting from 256 kbps, which can go up to 2,000 kbps and eventually 8,000 kbps.

Studies show most cable networks provide speeds of 64 kbps and 128 kbps only. Sometimes they claim 256 kbps; but with many cable providers this bandwidth is often split among several customers, said Mr. Goyal.

"In addition, we are sure to be the most competitively priced in the market."

Mr Goyal agreed that optical fibre networks can provide greater speeds, but "they will be that much more expensive to lay and will cost the customer too accordingly."

MTNL's CDMA expansion by four lakh lines each in Delhi and Mumbai will be underway by March this year, he said. Currently, the CDMA capacity in these cities is roughly 1.5 lakh lines each.

MTNL still does not have a universal access licence for its CDMA services (Garuda) and will have to confine itself to the Mumbai-Navi Mumbai area. This could compare unfavourably with other CDMA services, such as that of Reliance Infocomm.

However, Mr Goyal said, MTNL was targeting a "different social segment altogether" which will be offered a "cheaper rate" for Garuda.

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