The board, which met here on Tuesday, also approved the appointment of three non-official members--former Reserve Bank deputy governor Ravi Gupta, former Jammu & Kashmir chief secretary MP Khosla, and SN Malik.

A new slab of 30 hours will cost Rs 500 per month, with a one hour usage ceiling per day, and an additional hourly usage of Rs 10. With the reduction in the Internet rates, the 100 hour usage will now cost Rs 2,150, against Rs 2,550, while the renewal charges will be Rs 2,050. For 250 hours, the new rate will be Rs 4,700, with renewal at Rs 4,400, and for 500 hours the new rate will be Rs 7250, with renewal at Rs 6,800.

If the subscriber continues to use the 30 hours a month service for a year, the renewal charges would further be reduced to Rs 400. The first full meeting of the 10-member navratna board while approving the newInternet tariffs also decided to submit submit these tariff proposals to the Telecom Regulatory Authority of India (Trai).

The Internet tariff will also have a 50-hour slab for Rs 1,500, with no registration fee. MTNL chairman and managing director S Rajagopalan said: "Our main intention of reducing the Internet rates is to stimulate Internet demand and services in the country."

He added that another 20,000 lines for Internet access will be installed in Delhi and Mumbai. The board also approved the formal convening of the extraordinary general meeting (EGM) for changing the articles of association to empower the board with the navratna status.

The company also announced introducing a new 50-hour slab costing Rs 1,500 per annum, with a registration fee of Rs 500 to its Internet subscribers. Rajagopalan said the subscribers would not have to pay any registration fee for availing the 30-hour Internet service.

With the 15 per cent cut in Internet charges, subscribers availing 250 hours would have to payRs 4,700, against Rs 5,525, while the renewal charges stand at Rs 4,400. The 500-hour service will now cost Rs 7,250, compared with Rs 8,500, and the renewal fee will be Rs 6800, he said.

On the issue of providing new telephone connections with the Internet service, Rajajgopalan said the issue would be decided after a final meeting with Trai officials on Wednesday.

On the issue of the launch of wireless in local loop (WiLL) providing limited mobility on fixed-line telephones, he said that the matter would be taken up later with the regulator.

Meanwhile, despite the Trai order restraining MTNL from offering phones to Internet subscribers, the company is going ahead and taking on new customers under the scheme. MTNL CGM AK Bhatnagar said: "We are taking on 30-40 subscribers every day under the new scheme." In addition, old subscribers will also be offered phone connections without registration charges of Rs 3,000 as and when they renew their accounts.