State-owned Mahanagar Telephone Nigam (MTNL) posted a revenue ofÂ
Rs 5,786 crore during FY 2005-06, as against Rs 6,084 crore in
FY 2004-05. The telecom comapny earned a net profit of Rs 578 crore during the
FY 2005-06, as compared to Rs 938 crore during FY 2004-05, a decline of 61%.
This is worth an applause, considering the rapid decline in tariff and other
adjustments. The total number of phone connections went up by 15%. The
subscriber base went up from 5.15 mn during FY 2004-05 to 5.92 mn during FY
2005-06.
The year saw significant increase in GSM subscriber base for MTNL. From
881,696 in FY 2004-05, it almost doubled to 1,941,155 in FY 2005-06, a whopping
120% increase. Despite being a late
entrant in the GSM market, MTNL managed to increase its market share to 17%
during FY 2005-06.
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MTNL
Area of operation: Fixed
Services, Mobile Services, Internet Services, Enterprise Data Services
Address:
Jeevan Bharti Tower-I, 12th Floor, 124, Connaught Circus, New Delhi —110001
Phone: +91-11-23719020
Fax: +91-11-23314243
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This was also reflected in the income from GSM services, which went up from
Rs 2,874 mn to Rs 5,610 mn. The broadband subscriber base grew to 211,935 during
FY 2005-06, almost 40 times over 5,374 subscribers registered during FY 2004-05.
On the fixed line front, MTNL's subscriber base declined to 3,821,252, as
compared to 4,015,173 during 2004-2005. This impacted MTNL's income from the
fixed phone service which got reduced to Rs 52,494 mn in FY 2005-06 from Rs
55,924 mn during FY 2004-05. Other income went up from Rs 4,917.2 mnÂ
to Rs 5,361.4 mn, which was
primarily on account of interest on refund of income tax deposited in the
previous years. Thanks to the implementation of VRS, the staff
expenses saw a reduction. Some progress was also made in its cost control
campaign.Â
The company invited tender for increasing its bandwidth to cater to in-house
demand as well as leased/dedicated circuits of various capacities for Delhi and
Mumbai from the companies having license from DoT. Despite rhetoric on the
merger of MTNL and BSNL, nothing concrete emerged. Â
HIGHLIGHTS
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Earned a net profit
of Rs 578.6 crore during FY 2005-06
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Whopping 105%
increase in GSM subscriber base with 17% market share in Delhi and
Mumbai
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 Fixed line
subscriber base declined
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Broadband
subscriber base grew to 211,935 during FY 2005-06, almost 40 times
over the previous year
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MTNL also showed its interest in IPTV, as it began trials.Â
The company continued to remain committed on the rollout of 3G services
by giving an order of 2 mn lines for Mumbai. The company also gave Motorola an
expansion order for 800,000 GSM lines.
The company also set up an offline system for inter-operator billing system.
Also the validation and deployment continued during the last year. Other
important development of the year was MTNL managing to clear all the waiting
list except for technically non-feasible areas.
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'IPTV services
will boost demand for fixed lines'
How did MTNL perform
during 2005-2006?
Whatever actions we had taken in 2003-04 and 2004-05, now has started
bearing fruits. I am hopeful that in the coming year, it will be much
better.
Our first achievement
during the last year was that in the most competitive markets of Delhi and
Mumbai, we have beaten all operators in terms of net additions of
customers in the mobile telephony space. We gave 10.6 lakh new connections
to our customers against our nearest rival Airtel, who gave 9.5 lakh.
Hutch gave 9 lakh connections. Our market share, which was 5%Â
in 2003-2004, has increased to almost 18%.
CMD
RSP Sinha |
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Do you think you
failed in your broadband targets?
Broadband was the biggest success story for us. We started providing
broadband services on ADSL2 plus almost at the same time as in the US. We
were able to give better speed over a longer area. Our broadband
subscribers during 2005-2006 stood at 2.28 lakh. It is true that we did
not meet our targets. The main reason was the under-estimation of demand
on our part. We were giving 1,000 connections per day. The response to our
services was overwhelming and as a result, we fell short of CPEs which
caused delays in providing connections.
Being a PSU, we can't
buy products off the shelf as the private operators, and have to go
through a procurement process, which resulted in delays. It is very
unfortunate that we have a waiting list in Delhi and Mumbai. CPE shortage
has been taken care of and we hope that by July, we will clear the entire
waiting list. We not only succeeded but we exceeded the expectations of
the people.
What are your views
on landline surrender?
The surrender of landline phone is not a new phenomenon. Wherever the
monopoly has been taken away, there is always bound to be some surrender
of fixed line in order to have some diversity due to multiple options
available to consumers. The only issue was that whatever loss was taking
place in fixed line should have been compensated by GSM or CDMA customers.
But MTNL got the GSM license very late. So the lead period was available
to the private operators who were able to get the largest market share.
The fixed line
surrender has gone down. But if you need our broadband connection, you
also need fixed line connection.
What is the progress
on IPTV front?
I think there will be a huge demand for fixed line the moment we
launch our IPTV services. The technology we are trying to bring in is new.
IPTV throughout the world is working on MPEG2, which consumes larger
bandwidth. However, the MPEG4
technology, which is still in the process of getting matured, is our
choice. So we are ahead of
the US and other countries. We have tied up with content providers, and
are planning to launch the service in July.
What is the status
on 3G services?
The tender is almost on the verge of finalization. We are going for 2
mn lines each for Delhi and Mumbai, out of which 75,000 is for 3G. From
our side, we are ready but we are awaiting government allocation of 3G
spectrum. |
MTNL's most important challenge for the year 2006-07 will be to meet the
broadband targets and make fixed line services more attractive. It has also
shown a forward looking attitude by starting local dialing between Delhi and
Mumbai. With unbundling being talked about, it would be interesting to see how
the comapny deals with the competition. The launch of 3G services is also in the
offing, depending on spectrum allocation. The year 2007 is likely to see MTNL
launch its IPTV service.
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