"We are talking to some banks for arriving at a tripartite agreement involving our company, banks and customers to make this arrangement feasible," chairman and managing director S Rajagopalan said at a seminar on e-commerce for media organised by the Federation of Indian Chambers of Commerce and Industry (Ficci) here on Wednesday.

Besides billing, MTNL will also allow people to register online for new telephone connections in Mumbai and Delhi.

The company will also introduce other facilities including online shopping, telephone registration, co-branding of credit cards, payment of electricity and municipal tax.

"In the initial stages, online payment facility would only be allowed for bills of up to Rs. 2,000, which covers nearly half of our subscriber base in the two metros," he said.

In order to smoothen the transactions, MTNLwill also tie-up with private internet service providers (ISPs) to provide a strong bedrock for the programme.

MTNL has decided to take the plunge into online billing despite lack of cyberlaws regulating Net-based transactions. Rajagopalan said that the tie-ups with banks for transactions on the internet were necessary as electronic signatures were still not acceptable.

MTNL will also set up 200 business centres here which will be wired with fibre optics. These service cells will have the potential to transform operations of the corporates, mainly by cutting down costs.

The centres will have modern equipment and help corporates in slashing middle management layers by replacing it with computer logics, Rajagopalan said. "Some of the jobs being done by intermediaries also can be successfully replace through e-commerce."

Rajagopalan said advertisement revenues which can be realised through e-commerce is growing marginally over the years. In the US, $260 million were spent in the internet media last year.This compared with $173 billion spent on all other conventional mediums of advertisements.