State owned telcos BSNL and MTNL have entered into an agreement with the Indian Air Force to provide the latter whole range of telecom services. IAF would give space for installation of towers and equipment.

"The objective is to enable BSNL and MTNL to provide IAF full gamut of telecom services, including basic telephony, mobile telephony, broadband services, internet services and leased lines, MPLS-VPN and VSAT services, on concessional tariff," BSNL said in a statement.

It said that with the agreement coming into effect, the two public sector units will get "Most Preferred Service Provider" by Indian Air Force and provide space to them for installation of telecom towers and other telecom equipment.

Telecom services will include CUG facility on mobile phones and value added services on mobile and landline phones, optic fiber connectivity as per IAF requirements, it added.

"System integration solution will also be explored among telcos and Indian Air Force,"the statement said.

The telecom department is believed to be exploring the possibility of a grand alliance between service providers, BSNL and MTNL, along with research body C-DoT, gear maker India Telephone Industries (ITI) and Telecommunication Consultants of India Ltd (TCIL) to ring in operational synergies among these telecom PSUs.

If the plan were to translate into a reality, these companies will share their telecom assets and buy products and services at preferential rates to optimise central sector resources and withstand competition from private sector rivals.