Sources told The Financial Express that the MTNL board of directors will meet here on Friday to finalise the pricing of its much awaited "Bharat On Line" Internet service.

The decision will make it the cheapest Internet service at the moment in the country. MTNL chairman and managing director S Rajagopalan is expected to formally announce the details of the package on Friday. Sources said that the service will now be launched on February 2 in the two metros of Delhi and Mumbai.

The decision to reduce the service charges by as much as 30 per cent will prove to very attractive for prospective Internet buffs, as MTNL was keen on billing users on the basis of usage time in line with its pricing policy in other servcies.

VSNL has a three-tier pricing system for itsgateway Internet access service (GIAS). Under the first plan, it charges Rs 3,000 for 100 hours, Rs 6,500 for 250 hours and Rs 10,000 for 500 hours. In addition, it charges an incremental tariff of Rs 30 per hour in slabs of 20 hours.

Going by these prices, this effectively means that MTNL will be charging as little as Rs 2,100 for a 100-hour connection. However, the company may not adopt a multi-tier tariff structure but look towards bagging new customers. The rationale behind the decision is to increase the market instead of taking away existing VSNL users.

MTNL has already announced that it will offer 5,000 connections each in Delhi and Mumbai to start with, followed by an increase to 20,000 connections by April, 1999. MTNL is offering visitors a glimpse of its Internet service at the Swadeshi mela being held here at Pragati Maidan. The stall has been attracting a large crowd of people keen on getting a first look at the service.

MTNL has firmed plans to invest nearly Rs 8 crore and procured itsInternet equipment from major manufacturers including networking giant Cisco and Digital Corporation.