MTNL : The Story Of An ‘Aamdani Aathani Kharchaa Rupaiya’ PSU

The state run PSU MTNL is the perfect epitome of the adage ‘aamdani athanni kharcha rupaiya‘. And its not an exaggeration. For years the company has been earning half a cent and spending more than a dollar. And the firm has been very consistent about it. Seems to be happy too.

Let’s check its 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.

If these figures do not make you laugh the below figure will, for sure.

You would be surprised to know where exactly the expenses go when the operator is only operational in two circles with little over 3 million customers. And interestingly, its not spending too much money on its network or service offerings.

The operators spends more money on its employees than its total revenue!!

In FY2018, MTNL’s expense on its employees, including its salaries, pensions etc, was Rs 2446 crore whereas its income from operations was Rs 2372 crore, telecom minister said in a written reply in the Rajya Sabha. The employee cost for FY17 was Rs 2648 crore as against its services revenue of Rs 2870 crore, for FY 16, the employees cost was Rs 2637 crore whereas its revenue was Rs 3196 crore.

MTNL, that is operational only in two circles – Mumbai and Delhi, has more employees than Bharti Airtel, Vodafone and Idea cellular’s , and perhaps Jio’s employees put together.

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