Govt rings in OneIndia plan

BSNL, MTNL to offer domestic long-distance calls at Re 1/min.

Beginning March this year, Indian telecom users, irrespective of their network and location, will find that mobile phones and landlines offer the same Re 1 per minute rate for making domestic long distance calls, down from the current Rs 2.40 per minute.

Local calls will be available at 20 paise less for every three minutes for urban users and dearer by the same amount for semi-urban and rural area users. Mobile phones will lose one key selling point, STD calls made from them will no longer be cheaper than fixed lines.

After withstanding sustained pressure from Telecommunications Minister Dayanidhi Maran, Bharat Sanchar Nigam Limited and Mahanagar Telephone Nigam finally decided to bite the bullet and rolled a tariff structure that despite being called "OneIndia" actually has multiple rate slabs -- one for local calls within the network, another for other local calls and yet another for domestic long distance "" along with differing rates for prepaid and postpaid users.

Apart from the new local and long distance rates, tariffs for local calls made from mobiles within the network has been fixed at 40 paise and 60 paise per minute for post-paid and pre-paid users, respectively.

For the present, the PSUs' have decided not to extend the flat tariffs on calls made from public call offices and also via calling cards.

By announcing the new rates, the two firms on Friday set in motion a process that will force private operators to respond in kind.

It is another matter that they would rather have the telecom regulator continue to have supremacy in tariff making, a subject that will be debated extensively from now on.

One major consequence of this move is that the TRAI will now have to fashion its revenue share based ADC and revised carriage and termination charges to literally fulfil Maran's dream.

OneIndia's proponents term it as the death of distance. The two operators themselves were initially scared of introducing it. They did it with a smile on Friday.

However, the stock markets did not react to the announcement. The MTNL scrip closed at Rs 137.5, down from a Thursday closing of Rs 140.65, after hitting an intra-day high of Rs 143.45.

If the anticipated increase of 30 per cent in STD usage does not happen, BSNL alone will take a hit of Rs 3,000 crore in annual revenues.

BSNL Chairman and Managing Director AK Sinha had emphasised on a level playing field between mobile and landlines.

As the country's premier fixed line operators with 36 million landlines, the company had been losing out to mobile connections. The same applies for MTNL, Delhi and Mumbai's dominant fixed line service provider.

The trend of fixed line users moving to mobiles and making more STD calls from them may stop now. Maran also said the new rates would help stop surrendering of fixed-line phones.

"This marks the death of distance and STD. That will now be history," MTNL Chairman and Managing Director RSP Sinha said.

Fixedline users and post-paid mobile users will have to pay a rental of Rs 299 (an average increase of Rs 49 for most users) to dial into OneIndia, while pre-paid customers will have to get a minimum recharge of Rs 799 (inclusive of Rs 550 talktime) to avail of this scheme.