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MTNL set to take over Madras too

Sources in the ministry of telecommunications have been reported as saying that the MTNL bid is in the final stages of clearance and a decision will be taken soon.

T O D A Y

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The Tamil Nadu government, MTNL and the Department of Telecommunications are the main participants in the bid.

"Only the valuation of fixed assets is remaining, and once this is over, MTNL will take over Madras from DoT," ministry sources have been quoted.

Communications Minister Sushma Swaraj will take the final decision on the matters.

The addition of the Madras circle would be very significant to MTNL's growth. The company has been planning to expand its base to pre-empt competition from private and foreign players who are set to enter the recently decontrolled sector.

Bombay and Delhi are the country's biggest circles and MTNL already has a monopoly in these cities. Madras is also large and its teledensity is lower, leaving much scope for growth.

Several reports proposing corporatisation of DoT had recommended that MTNL take over both Calcutta and Madras circles. Calcutta has a teledensity of nearly 4 (number of lines per 100 persons), in Madras it is around 8.38. In Bombay, the teledensity has reached 13.27.

MTNL chief S Rajagopalan has achieved faster deployment of telephone lines. He is likely to reduce the waiting period for connections and improved efficiency in Madras.

Winning the Madras circle is also likely to help MTNL in its cellular telephony venture. Calcutta and Madras have extremely low penetration rates. The teledensity in Tamil Nadu is around 1.4. The demand is expected at the rate of 16.6 per cent per annum until 2005. In Madras, the demand is expected to grow at 10.9 per cent per annum.

- Compiled from the Indian media

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