Thursday, September 15, 2016

Will MTNL turn profitable next year after posting Rs 718 cr loss in Q1?

STATE-run telecom major MTNL's standalone loss was at Rs 718.02 crore in the April-June quarter this year against that of Rs 734.24 crore in the same period a year ago. Total income of MTNL during the reported quarter declined by 4.5 per cent to Rs 744.72 crore from Rs 780.12 crore in the corresponding quarter of 2015-16. Income from basic and other services declined to Rs 612.74 crore in April-June 2016 from Rs 648.68 crore in the year-ago period. Revenue from cellular services declined to Rs 163.01 crore from Rs 166.33 crore.
Earlier, in June this year, State-run firm MTNL said it expected to post operational profit at the end of the current financial year and turn profitable in 2017-18.
"We expect to be operationally profitable in 2016-17 and completely profitable in 2017-18," MTNL Chairman and Managing Director Narendra Kumar Yadav said.
MTNL has been running into losses since 2009-10.
The PSU reported operating loss of Rs 526.42 crore for the Janaury-March quarter of 2015-16. However, it was able to post a net profit of Rs 174.58 crore for the quarter on account of refunds for surrendering CDMA spectrum. For the full 2015-16 fiscal, it reported operating loss of Rs 1,944.60 crore on standalone basis.
For the fiscal ended March 31, 2016, MTNL's standalone net loss narrowed to Rs 2,005.74 crore, from Rs 2,893.39 crore a year-ago period.
"Out of the total loss of about Rs 2,000 crore, about Rs 1,800 crore is from mobile services which accounts for only 15 per cent of MTNL's revenue. Now we will focus on basic telephone business for growth and look at partnership with BSNL for running mobile business," Yadav said.
The company is looking at BSNL to provide equipment for its mobile services in Delhi and Mumbai circles as managed service provider on revenue share basis.
MTNL is also looking to expand its basic or fixed services network in partnership with private players on revenue share basis.
"Since last six years MTNL has not been able to procure equipment because of financial constraints. We expect our discussion with BSNL to show result in next 4-5 months to improve mobile services," Yadav said.
He said that MTNL was given broadband and 3G spectrum for which it paid Rs 11,000 crore in 2010 which affected its balance sheet.
The company is targeting to connect about 1.5 lakh buildings in Delhi and Mumbai with optical for providing its services in next 1-2 years.
The telecom major is also looking to utilise rooftop space for generating 1 megawatt of solar power.

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