India’s MTNL Rolls Out Online Payments Before Legislation

Despite the notable absence of approved legislation for online transactions, Mahanagar Telephone Nigam Ltd. (MTNL) is all set to facilitate online payment of bills as of Aug. 15, India’s Independence Day.

“We decided to go ahead, instead of waiting for the Indian government to
enact cyber laws,” said S. Rajagopalan, MTNL’s chairman and managing director.

He also announced the establishment of shopping malls on the Internet and starting of an online telephone registration system to be launched on Independence Day. Co-branding of credit cards, payments of electricity and municipal tax are also in the works.

The consumers would be able to verify bill amounts and effect payment
through the MTNL Web site.

“In the initial stages, online payment facility would only be allowed for
bills up to Rs 20,000 ($470), which covers nearly half of our subscriber
base in the two metros (Mumbai and New Delhi),” he said.

“We are talking to some banks for arriving at a tripartite agreement
involving our company, banks and customers to make this arrangement
feasible,” Rajagopalan added.

Market sources feel that MTNL has taken a very bold step in deciding to take the plunge into online billing despite lack of laws 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.

To facilitate online payment for those who do not have a computer, MTNL
plans to install 50 to 60 “cyber kiosks” in both cities.

“The equipment for the cyber kiosks is on the way and we hope to install the first few kiosks by August 15,” he said.

MTNL will set up 200 business centres in New Delhi, which will be wired with fibre optics. The centers will have modern equipment and help corporates in slashing middle management layers by replacing it with computer logics.

“Some of the jobs being done by intermediaries also can be successfully replaced through e-commerce,” he added.

Also on the anvil are online shopping malls at MTNL’s ISP site BharatOnLine as
well as Web payment facilities for different utilities through MTNL.

In another development, private ISPs in India have complained to the Telecom Regulatory Authority (TRAI)
about the 15 percent cut in Internet tariffs announced recently by MTNL>.

The ISPs have informed TRAI that while they were not against the tariff
cuts, they wanted MTNL — the major fixed line telephone company in the two
metros — to cut tariffs for resources used by them including leased lines,
customer dial-up lines and ISDN connections.

“If the network operator wants to give discounts, the cuts should be
extended to us as well, so that there is a level playing field,” a
spokesperson of the ISP industry said. According to the source, network resources
account for 15-20 percent of operating costs of a national ISP.

“MTNL owns
these resources and obviously their overall costs are lower,” the spokesman said.