MTNL revival plan on course; no move to close: CMD

MTNL CMD PK Purwar

AMIDST reports of state-owned Mahanagar Telephone Nigam (MTNL), which provides telecom services in Delhi and Mumbai circles, struggling to stay afloat with declining revenues and mounting losses in a fiercely competitive market, the once crowning jewel's chief PK Purwar has said an internal panel of Telecom Department is meeting on regular basis to discuss the revival options for the ailing state-owned firm, and ruled out any talks on closure...
of the company at this point. “…all the discussions that MTNL had with Department of Telecom (DoT) or in the government is about MTNL’s revival, and manner in which the legacy issues can be addressed…there is neither any proposal nor discussion about closure of MTNL, in any manner,” Purwar, CMD of MTNL, told a news agency.
In September last, DoT constituted an internal panel to carve out a future path for the debt-laden Mahanagar Telephone Nigam Ltd (MTNL), which offers telephony services in Mumbai and Delhi circles, and Purwar said the committee continues to meet at regular intervals to discuss various options for revival. “We have not been communicated formally or informally about any plan of the government to close down MTNL. The internal committee for revival of MTNL held its last meeting as recently as April 18, where various options for revival were discussed. The path of revival is being worked out,” he emphasised.
However, another report said the government is finally exploring the option of shutting down the debt-laden firm and monetise its land, buildings and tower business. What has forced the government to explore the option is that MTNL’s 20-year licence fee will come up for renewal in April next year, which would require the company to pay an unaffordable Rs 11,000 crore.
MTNL has a huge staff strength of 27,919.
Successive governments at Centre explored the possibility of merging MTNL and BSNL and creating one single company but it could not fructify because of HR-related issues. Any merger is not possible today be cause even BSNL is incurring losses for the past 5-6 years and is saddled with a huge workforce. Telecom Minister Manoj Sinha in a written reply to Lok Sabha in February had pointed that both BSNL and MTNL have been incurring losses for a number of years, and therefore, have been declared as ‘incipient sick’ as per Department of Public Enterprises (DPE) guidelines. Sinha had also said that the revival plan of MTNL prepared by its consultant “is under consideration” in DoT.
The recommendations include defending current revenue and additional revenue streams, asset monetisation, lowering retirement age from 60 to 58 years for employees, Voluntary Retirement Scheme (VRS), debt restructuring and finding synergy in operations of MTNL and BSNL.
MTNL’s debt stands at a staggering Rs 17,000 crore, and its annual interest burden is close to Rs 1,450 crore. Bruised by a fierce competition from private sector players, MTNL’s losses were pegged at Rs 2,893 crore in 2014-15 , Rs 2,005 crore in 2015-16, and Rs 2,970 crore in 2016-17.