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The Mahanagar Telephone Nigam Limited has turned down an out-of-court settlement that the Cellular Operators' Association of India offered.

MTNL is the state owned basic telephony giant in the high teledensity metros of Bombay and New Delhi.

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When MTNL proposed doing cellular telephony in the two cities, the existing cellular operators opposed the move, pleading that allowing one more player in the field would worsen the already sluggish business.

Currently, the government allows a duopoly in every 'telecom circle'. That is, for one cellular region, only two players are permitted. MTNL's entry into the business would have broken the rule and brought in a third player.

All this ensured that the matter landed up in court.

Now, MTNL says the conditions put forth by the cellular operators for an out-of-court peace pipe are unreasonable.

In one of the conditions for the settlement, the COAI wants the Telecom Regulatory Authority of India to decide the entry conditions for MTNL so as to ensure a level playing field.

Private operators in Bombay and New Delhi want MTNL to follow the same licence conditions that they had to follow and this includes the licence fee.

Rejecting the private operators' proposal, MTNL points out that instead of any advantage over others, it would in fact suffer the disadvantage that go with entering a market late.

The existing operators already have a large subscriber base in the two cities. MTNL will have to work hard to create a market for itself. Moreover, MTNL has a large workforce that it cannot remove because it is a government company, company officers claim.

MTNL has also pointed out that the TRAI does not have powers on the issues related to licences. This would mean that the COAI proposal is also impractical.

"I welcome the industry's offer for the out-of-court settlement but their demands are not acceptable to us," MTNL Chairman and Managing Director S Rajagopalan has been quoted as saying.

Earlier:

• How to win friends and influence government
  Private operators may withdraw HC petition that objects to MTNL's cellular telephony plans.

- Compiled from the Indian media

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