With an eye on the fourth player slot, MTNL is also looking at every possibility including alliances and acquisitions. "We are in talks with five-six players including a few Delhi-based private ones." said Mr Sharma. Mr Sharma did not disclose details but said that talks with VSNL are at a very advanced stage. To give the cellular business a clear thrust, a separate division called MTNL Cellular division has already been set up under the Chief General Manager who will act as the Chief Executive Officer.

The CGM will be based in Delhi and will have two general managers, one each in Delhi and Mumbai, reporting to him along with a General Manager (finance). The cellular division will have a separate account from the parent company. "This (separate account) should take care of the cross-subsidisation issue," Mr Sharma said. Ever since MTNL has announced the tariff for its proposed cellular service, the cross-subsidisation issue, has taken the centre stage. Analysts agree that it makes tremendous business sense for MTNL to fan out into other cities, they are not entirely convinced that the government will allow it to compete with another government entity, Bharat Sanchar Nigam Limited, which is the third player in the now four-player per circle cellular business. They also seem to question the rationale of an alliance with VSNL. "Why would VSNL allow MTNL to take a bite in the cake that is its own?" a Mumbai-based analyst said. The company is launching its cellular service under the "Dolphin" brand name in Delhiin January followed by Mumbai in February.