MTNL offers 'Free 3G' to lure Delhi's users
Needs to kickstart 3G uptake before new licensees come to market
Published: 26 May, 2010
READ MORE: India | MTNL | UMTS
The long lag between investing in 3G networks and seeing mass uptake is always a problem for hard-pressed operators, as the Chinese trio have experienced. Indian state-owned telco MTNL is addressing the issue in its Delhi and Mumbai territories by offering 3G services to its 2G customers at no extra charge.
The firm needs to kickstart customer acquisition before privately held rivals enter the market - these companies had their new 3G licenses confirmed on Friday and are expected to start rolling out HSPA from the third quarter. MTNL holds licenses for the two major cities, while fellow state telco BSNL has the rest of the country, and both were given early access to their spectrum. However, so far they have seen only limited uptake of their offerings, in a market that has the lowest ARPU on earth and is 95% prepaid. MTNL has 400,000 3G users in Delhi and Mumbai, out of a total of 4.8m, according to local web service TelecomTalk.
Against this backdrop, MTNL has announced 'Free 3G' for all Delhi users of its GSM services, called Dolphin (postpaid) and Trump (prepaid). Customers can convert these tariffs to 3G for free, getting a new SIM card and retaining the same voice charges. Extra charges will be for data. For those on 'pay per second' plans, these will be one paisa (INR0.01 or 0.02 US cents) per second for video calling and one paisa for 10Kb of data. For those on postpaid or prepaid per-minute tariffs, the fees will be 60 paisas per minute and two paisas for 10Kb.
A sticking point for many users in this mainly prepaid market will be whether their handset is 3G-capable. MTNL has accepted it will have to offer more subsidies to encourage uptake. Its main 3G handsets come from Nokia and local vendor Micromax.
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