Friday, December 15, 2017

MTNL readies Rs 4,200-crore revival plan: Report

STATE-owned telecom operator MTNL has prepared an ambitious Rs 4,200-crore transformation plan even as it faces a financial crisis. MTNL, with presence only in Mumbai and Delhi, wants to start new 4G network in the two cities while expanding its 3G base.
The ailing PSU, which posted Rs 2,000 crore loss in 2016-17, has admitted that it has old fixed line technology that was inducted 25 years ago and its mobile network has quality issues.
The telecom PSU prepared a revival plan when the NDA government was actively considering disinvestment in loss-making central public sector undertakings.
Although NITI Aayog had clarified...
last year that there’s no plan to close or divest MTNL for the time being, reports said that PMO might consider a strategic sale.
The MTNL has prepared Rs 2,100 crore revival plan to improve its mobile business and another Rs 2,140 crore plan for wireline network.
The PSU wants to install 2,000 3G Node-Bs each in Delhi and Mumbai and 1,000 eNode Bs for 4G, apart from modernising its billing and IT infrastructure. Experts maintained that the company needs to upgrade its infrastructure to compete with private players.
While many Opposition MPs in the finance panel—led by Congress’ Veerappa Moily—is ideologically opposed to divestment in government’s telecom arm, they took note of MTNL’s highly unproductive workforce.
Heavily subsidised by the government, MTNL has 7,186 Grade D and 15,635 Grade C employees and 899 and 3,026 employees in Grade A and B respectively.
The average age of these employees is more than 50 years and they are drawing salary in the upper bracket in their scale and hence salary cost is also very high.
Earlier, in 2009, MTNL had a 71 percent and 60 percent share of the fixed-line phones market in Mumbai and New Delhi, respectively. MTNL then had a 16-17 percent share of the mobile phone market.
Today, the total indebtedness has grown up to Rs14, 921.55 crore (March -17) and it was borrowing money to meet its day-to-day expenses. Gross revenue from operations has declined steadily from Rs6, 370.40 crore in 2004 to Rs2, 849.12 crore in March 2017. Like most PSUs, MTNL is also grossly overstaffed, with its employee costs topping its revenues.
MTNL was set up in 1986. Even when the government in 2002-03 was looking at PSU disinvestment, MTNL was considered an exception and was given Navratna status in 1997 and was listed on the New York Stock Exchange in 2001.

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