MTNL cannot match service package of pan-India operators: Government

NEW DELHI: Limited operations of MTNL in just two circles, Delhi and Mumbai, make it difficult for the state -run telecom firm to match service and tariff packages offered by pan-India operators, Minister of State for Communication and IT Milind Deora said today.

MTNL is not operating in Tier-II and Tier-III cities where maximum growth is happening, Deora said while presenting the status report on the recommendations of the 31st report of the Standing Committee on IT in the Lok Sabha.

"MTNL is operating telecom services only in two cities of Delhi and Mumbai and does not have a pan-India presence, therefore it becomes difficult for MTNL to match the various service/tariff packages as can be done by a pan-India operator," the statement said.

MTNL's competitors, having pan-India presence, can offer discount on calls to their network elsewhere in the country, it said.

"MTNL had to pay Rs 4,533.97 crore towards one time spectrum based on auction prices received by the government... (For) such unexpectedly large amounts, short term loans had to be taken by MTNL," it said.

Besides, the potential revenue is low because of the low tariffs due to cut throat competition.

The government, in order to increase the market share of the public sector undertaking (PSU) is accelerating the pace of expansion of data services and mobile services with upgradation of technology.

Also, MTNL is trying to leverage data services to increase customer base and revenue, it added.