music to the ears

Mumbai, Feb. 24: Mahanagar Telephone Nigam (MTNL) today saw Trump, its prepaid mobile card, grabbed by frantic buyers bowled over by its talk-time bargains.

That this happened despite heightened competition among mobile phone makers left many surprised. Especially, since the cards flew off the shelves within hours.

“What can we do, demand is more than supply,” a senior MTNL official said. Reports of the Sim card fetching a premium in the grey market are also doing the rounds, adding to the concerns among executives.

“There could be some foul play in our sub-dealer distribution network, but we are trying our best to meet the burgeoning demand,” an MTNL official added.

The PSU telecom major had a capacity of only one lakh lines, which has now been raised to 2.25 lakh subscribers. There are plans to expand capacity to four lakh lines by the end of this year. “We are selling 1200 connections every day in the city of Mumbai,” he added.

“We cannot expand the way our private competitors do”, the source added. The allusion was that being a public sector company, MTNL has to follow the due process of tenders to acquire new equipment — unlike its more nimble private sector competitors.

Subscribers have been floored by Trump, which offers rates that are unmatched in the industry so far. The initial entry cost for trump SIM card is Rs 225, which is refundable in two instalments within six months. Outgoing calls at 40 paise per 30 seconds, and free incoming calls from 10 pm to 8 am, are other attractions.

In addition to this, the Trump recharge coupons offer 100 percent talk, unlike those of its aggressive private competitors. This means MTNL does not hit subscribers with hidden overheads, such as processing fees. “We are up-front with our rates,” the official said.

Many in the industry doubt whether charging such low rates will make MTNL’s services a profitable proposition. Officials put the average break-even rate per subscriber at Rs 350 against an average spend of Rs 375.

Analysts say it is the low-end subscriber who goes for this offer. However, MTNL officials rebut this claim by saying that it has received subscriptions for charge coupons worth Rs 2000, which proves that the high end subscribers are also finding its offer very attractive.

Officials say things will get better for the company when it offers free roaming in a tie-up with BSNL. The telecom titan has an all-India footprint, barring Mumbai and Delhi, where MTNL has a strong presence.