MTNL plots return to profitability

4 Sep 2013

Debt-laden state-backed telco Mahanagar Telephone Nigam Ltd (MTNL) has prepared a strategic roadmap which aims to make the provider profitable by 2017/18, the Economic Times writes. The plan suggests that an annual investment of INR5 billion (USD73.7 million) will be necessary to maintain its market share and identifies financing costs, pension and spectrum issues as the primary causes of the operators current woes. MTNL chairman and managing director A K Garg noted that the company is ‘expecting resolution of pension issues which will give us benefit of [INR20 billion] annually.’ TeleGeography’s GlobalComms Database notes that in the year to end-March 2013, MTNL’s staffing fees (including pension costs) reached INR43.28 billion, equating to around 126% of revenues for the same period, which totalled INR34.29 billion.

Tackling the issue of financing costs, MTNL intends to use an expected refund from the government for the return broadband wireless access (BWA) spectrum to cut down its debt burden. The company owes more than INR100 billion and pays around INR12 billion annually in interest fees.

India, Mahanagar Telephone Nigam Limited (MTNL)