Chairman and managing director, S Rajagopalan, told reporters here on Wednesday that MTNL was unable to hike rental charges to Rs 610, as recommended, from Rs 380. This could be done only in two phases and initially the rental could be raised to around Rs 500, Rajagopalan said.

On another recommendation of TRAI on reducing free calls to 125 from 150, he said the idea behind free calls was to promote telephone use. MTNL has suggested flat rates in lieu of the slab-wise tariff structure and has also ruled out an immediate reduction in tariff for long-distance national and international calls.

"If we reduce it further, it will affect our infrastructure," Rajagopalan said, adding that reduction of rates may be done in a phased manner. According to him, themandatory requirement of quoting a "permanent account number" (PAN) for a new telephone connection would hit telephone connections.

"My vision for a new phone application form is having just four lines that would provide only basic information required such as name and installation address," Rajagopalan said, adding that the government has made it mandatory to quote PAN for various transactions including seeking a new telephone connection.

He said that MTNL would introduce a Cyber Dhaba service for consumers in Mumbai and Delhi based on the concept of a public internet services facility targeted at the walk-in customer, run by entrepreneurs with complete business centre facilities of communication like fax, smart public call office, e-mail, video conferencing and cyber shopping for a reasonable fee. A network of 20 Cyber Dhabas has been envisaged in Mumbai and Delhi as a pilot project and by January 1, 1999, another 20 will be added.

UK-based SCO along with other leading technology providers have workedclosely with MTNL in implementing the pilot project which was launched on Wednesday at the SCO pavilion at the exhibition on the convergence of technology at Bandra Reclamation in northwest Mumbai. More than 100 companies have put up their stalls.

Rajagopalan said that MTNL would provide a special community service for select schools in Mumbai and Delhi entitled "Cyber School Connections."