-

Restricted to offer services in only two f the 22 telecom circles in the counry, state-owned Mahanagar Telephone Nigam Limited (MTNL) might be struggling to match the mobile subscriber base of private operators, but in the internet and broadband arena, it is a clear winner. Despite its limited presence, the company is the second largest broadband service provider in India after Bharat Sanchar Nigam Limited (BSNL), which has much bigger operations and presence. As of June 2008, MTNL had a broadband subscriber base of about 600,000 compared to BSNL's 2.3 million. Today, broadband is MTNL's key thrust area.

With its extensive landline network, the company could easily bundle fixed line services with broadband. This would not only arrest the drop in the wireline subscriber base, but will also become an additional source of revenue. However, with near saturation as well as intense competition in the two metros –­ Delhi and Mumbai –­ MTNL has had to constantly improvise and launch new offerings. In the past two years, the company has not only introduced services like internet protocol TV (IPTV), voice over IP (VOIP) and video calling, but it has also constantly updated its range of value-added services. MTNL offers a wide range of innovative plans, and its tariffs are also among the lowest in the two metros.

Broadband initiatives
MTNL launched IPTV services in October 2006, at a time when companies like Reliance Communications (RCOM) and Bharti Airtel were still running trials for IPTV. In fact, it was the first operator to offer this service, even before BSNL, which launched IPTV services in 2007. MTNL has constantly enhanced its IPTV offering and currently provides over 250 channels compared to the mere 25 channels it started with.

In April 2008, MTNL tied up with Aksh Optifibre to provide its Mumbaibased broadband customers with a bouquet of 100 IPTV channels and video phone calling services. It had earlier tied up with IOL Netcom for providing around 150 channels. In Delhi alone, MTNL is targeting around 50,000 IPTV customers by December 2008.

MTNL's latest IPTV offering is time shift TV, through which users can view programmes aired on any channel over the previous three days at the push of a button.

Apart from IPTV, other key broadband-based services offered by MTNL are video-on-demand (VoD), voice over IP telephony (VOIP) and video phone calling.

The company launched VOIP services in August 2007 in association with Aksh Optifibre. Its VOIP tariffs are also the lowest in Delhi and Mumbai. In February 2008, the company reduced international call rates for its VOIP users for calls to about 100 countries including Saudi Arabia, Pakistan, Japan, Malaysia and Kuwait. Calls earlier charged at Rs 6, Rs 8 and Rs 12 per minute are now charged at Rs 4, Rs 6 and Rs 8 per minute respectively. Similarly, calls earlier charged at Rs 2 and Rs 3 per minute now cost Re 1 per minute. In September 2008, MTNL branded its VOIP services as Pigeon.

In March 2008, MTNL launched a new video phone calling service called V Spyk. Launched in collaboration with Aksh Optifibre, the service enables personalised, real-time communication between users and is available to all MTNL broadband subscribers in Delhi and Mumbai.

The way forward
While the company has witnessed a decline in its bottom line over the past two years, the share of internet and broadband in the total income has increased from 4 per cent in 2006-07 to 7.1 per cent in 2007-08. In what makes good business sense, MTNL aims to increase its broadband penetration from 14 per cent of its subscriber base to 100 per cent over the next five years. To this end, the company is investing in 500,000 ADSL broadband lines. By end-2008, MTNL is targeting 2 million broadband users.

The company is also building an allIP wireline core network which would serve its long distance telephony needs between Delhi and Mumbai and integrate the landline, broadband and IPTV offerings. As a senior official at MTNL puts it, "We are basically looking at a twentyfirst-century network. The IP network will make the rollout of new services much faster. It would be easy to manage the network because we would have only one network to control. The opex will also come down considerably."

All in all, MTNL's relatively slow pace of mobile subscriber addition, coupled with a stagnant wireline subscriber base, has made it more aggressive in its foray into triple-play services. This may help the company to pull up its revenues and offset the decline in the fixed line business.