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Tuesday, August 4, 1998
Right decision
Mahanagar Telephone Nigam Ltd's (MTNL) decision to bid for operating basic telephone services in Tamil Nadu and West Bengal is the right one. Operating basic services is MTNL's area of core competence, an area in which it has an enormous amount of experience. It would be in the interests of the nation to ensure that this expertise is given full scope for expansion. Some grey areas, however, remain. For instance, there is a revenue-sharing agreement between MTNL and DoT, in terms of which, 25 per cent of MTNLs revenues go to DoT. It can be argued with some degree of truth, therefore, that competition between DoT and MTNL would not be a full-fledged one. This argument would be particularly true if one considers that both MTNL and DoT, being in the public sector, have near-identical work practices and face the set of constraints faced by all public-sector units.In the near future, DoT would be corporatised and renamed as India Telecom. This raises a question mark over the future of all those employees of DoTon deputation with MTNL. There is a possibility that the employees might be given the option to join any one of them. In this scenario, there could be problems when MTNL and DoT are the basic- service providers in a particular circle. MTNL, with its existing tie-ups for setting up basic infrastructure networks, would also be having an advantage over any other private operator bidding for the same circle. All this means there is a case for including a third private operator in areas where MTNL and DoT operate. This would go a long way in ensuring true competition between the basic-service providers. Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.

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