How The Govt. Wants To Revive MTNL

The government of India runs two pure play telecom operators – BSNL and MTNL – and both the firms are consistently making losses for close to a decade. Of these two, MTNL has already been declared as a ‘sick’ company, or in precise terms, as ‘Incipient Sick Central Public Sector Enterprise’ or ‘CPSE’.

Many plans have been floated in the past to revive MTNL that operates only in two circles – Mumbai and Delhi.  There were also some discussions in the past to merge both the PSUs. But nothing has been deployed concretely to check for outcome.

Let’s Look At The Financials

In FY2018, ending March 31, 2018, MTNL earned a revenue of Rs 3116 crore. Its total expense for the same fiscal was Rs 6087 crore, showing a loss of Rs 2971 crore. Means, its expense is almost half of its earning.

In FY2017, the PSU’s revenue was Rs 3552 crore whereas its expense for that year was Rs 6523 crore, registering a loss of Rs 2971 crore – again almost half of its revenue.

Similarly in FY 2016, MTNL’s total revenue was Rs 3513 crore and expense was Rs 5519 crore, posting a loss of Rs 2006 crore.

These are the financials of the company for last three years only, and the years before these are equally bad. For FY14 and FY15, the firm’s expense were more than Rs 5000 crore whereas revenues were around Rs 3000 crore.

What’s Bugging MTNL

According to the telecom minister, one of the major reasons for losses of MTNL is huge legacy staff cost. The company that operates only in two circles has more employees than India’s top 3 large operators – Airtel, Vodafone-Idea and Reliance Jio.

Besides, the service revenue is declining due to intense competition resulting into cut throat tariffs, Sinha said. He also cited that inability of MTNL to infuse capital expenditure (CAPEX) to upgrade its network is also hampering the growth of the PSU.

Also Read : MTNL : The Story Of An ‘Aamdaani Aathani Kharcha Rupaiya‘ PSU

One more recent phenomenon that’s impacting MTNL’s performance is 4G. While all existing private operators offer 4G services, both the PSUs are yet to launch the service.

“All private telecom operators are offering 4G services leading to churn in mobile segment of MTNL. Due to thisMTNL’s revenue from operation has reduced,” Sinha said in a written reply in Lok Sabha recently.

He, however, said that a ‘revival plan for MTNL’ has been received by the DoT (department of telecommunications).

The summary ofrecommendations include focus on customer, defending current revenue and gaining additional revenue, Network CAPEX investment, Asset Monetization – Lease, Sale of real estate, buildings, Lease/sale of Tower, Fiber, Copper and active equipments, Voluntary Retirement Scheme (VRS), Debt restructuring and Synergy in operations of MTNL and BSNL etc.

Also Read : MTNL Asks Rs 1067 Cr, Gujarat Model To Consider VRS

Below initiative are being taken to revive MTNL:

  • Expansion of GSM / 3G RF network in Delhi: MTNL is in the process of expansion of mobile network by adding 1080 nos. of 3G sites for upgrading Data handling capacity to 10 Gbps. Purchase Order for Rs. 295 Cr. has been placed on 18.06.2016. Purchase Order for Rs. 48 Cr has been placed for up gradation of existing 720 nos. of 3G Node-B for High Speed Packet Access (HSPA)+ capability.
  • 3G Network Up-Gradation in Mumbai:To improve network capabilities and provide better speed MTNL is upgrading the existing 3G network (720 Node-Bs) at a cost of Rs 28 Cr. Software Up-gradation for the existing Node-Bs has been implemented for HSPA+ and 324 Node B’s have been integrated in IP for 21Mbps (Mega bytes per second) speed.
  • Microwave Backhaul Connectivity: In Delhi, Purchase order for adding 800 new Hybrid Microwave hops at the total cost of Rs 19.36 Cr and upgradation / replacement of 754 no. of existing TDM Microwave hops to Hybrid Microwave hops of 400 Mbps capacity at the total cost of Rs 18.75 has already been placed. In Mumbai, upgradation/ replacement of 497 no. of existing TDM Microwave hops to Hybrid Microwave hops of 400 Mbps capacity are already placed for total cost of Rs 11.54 Cr.
  • Synergy with BSNL: To enhance the synergy in between MTNL and BSNL in line to the MOU signed between these two companies, BSNL has been requested to take care of Billing of Leased Lines / Land Line / Broadband of MTNL. Work has been started already to make over Leased Circuit data for billing purpose. In addition, BSNL has also allowed MTNL to share its STP for Mobile network of MTNL Delhi and Mumbai.
  • Redeployment of DSLAMs (Digital Subscriber Line Asynchronous Mode) of existing Broadband Network: MTNL has launched a special program to progressively increase the fibre length by redeploying the broadband nodes (DSLAMS) near to the subscriber premises in Delhi and Mumbai thereby reducing copper length and enhancing the quality of broadband service. 186 DSLAMs in Delhi and approx.164 in Mumbai have been redeployed thereby reducing copper length and enhancing the quality of Broadband service. This has improved customer experience and reduced the number of complaints.
  • Fibre to the Home (FTTH): MTNL has finalized and made operational its new policy to engage partners on revenue share basis to extend its FTTx services.
  • Provision of High Speed Internet on FTTH and Wi-Fi at the Hon’ble M.Psresidences: The House Committee, Lok Sabha has assigned MTNL the work to provide high speed Broadband on FTTH and Wi-Fi services at the residences of Hon’ble MPs in Delhi. The project includes OFC laying, FTTH provisioning and Wi-Fi equipmentinstallation at 790 residences of Hon’ble MPs in New Delhi and involved laying of 86 Kmof Optical fiber cable in 11 rings. MTNL has provided FTTH connections to 750 MPs in their residential accommodations in New Delhi. The Wi-Fi service has also been activated at 728 residences. The Project cost of about Rs 43.2 Crore is funded by DoT.
  • ATC project for Mumbai Traffic Police: MTNL has extended bandwidth to ATC (Area Traffic Control) Project of Mumbai Traffic Police for Road Traffic Monitoring. 125 Locations of ATC were given OF and Copper Bandwidth. 8 Locations of ATC on Eastern Freeway were extended OFC bandwidth. 23 more locations are planned to be connected in ATC.

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