NEW DELHI: This can act as a trigger to a new price war in long-distance calls within India. The state-run Mahanagar Telephone Nigam Ltd (MTNL) on Tuesday launched its long-distance service between New Delhi and Mumbai, bringing the call charge for its landline customers to a mere Rs1.20 for a three-minute call between Delhi and Mumbai.

The new rates, to be announced shortly, will come into effect from June 1. MTNL currently charges Rs1.90 a minute for a call between Delhi and Mumbai. This move brings down the rate by nearly by 375 per cent, and the new tariff matches local call rates.

MTNL is now opting for the Tata-owned Videsh Sanchar Nigam Ltd (VSNL) as its preferred carrier for STD calls. Till now, BSNL was MTNL’s carrier for long-distance calls.

The new MTNL rate for calls between the two cities, which will come into effect from June 1, was announced by MTNL CMD R.S.P. Sinha in the presence of Communications and Information Technology Minister Dayanidhi Maran.

MTNL has a licence to operate only in the metros of New Delhi and Mumbai. It has 3.8 million fixed line users in both these cities put together.

It is expected that in slashing call rates, other operators will follow suit to remain competitive in the Delhi-Mumbai sector, which is a hugely lucrative market.

Telecom PSU BSNL charges Rs2.40 a minute for STD calls throughout India, except between Delhi-Mumbai, while private operators charge up to Rs2.65 a minute.

On his part, Mr Maran said this was an effect of policy decisions by the department of telecom to bring down the licence fee for NLD and ILD to a uniform Rs25 million from Rs250 million and Rs1 billion respectively.

Mr Maran said the DoT has received as many as 16 applications for NLD licences and two companies have been issued the letter of intent (LOI) while MTNL was granted the licence.—By arrangement with The Times of India.