Cutthroat Tariff War and Lack of 4G Services Hurting MTNL: Government

The government on Wednesday said legacy staff cost, cutthroat tariff war, and absence of 4G services are some of the major reasons for losses at state-owned telecom firm MTNL. Telecom Minister Manoj Sinha informed the Lok Sabha that the Department of Telecom had received revival plan of MTNL, which has been declared ‘Incipient Sick’, as per the Department of Public Enterprises guidelines.

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Mahanagar Telephone Nigam Limited (MTNL) currently has the licence to operate in Delhi and Mumbai. “One of the major reasons for losses of MTNL is huge legacy staff cost. Besides, the service revenue is declining due to intense competition resulting in cut-throat tariffs, the inability of MTNL to infuse capital expenditure (CAPEX) to upgrade its network. All private telecom operators are offering 4G services leading to churn in mobile segment of MTNL. Due to this MTNL’s revenue from the operation has reduced,” Sinha said, according to PTI.

In the second quarter ended September 30, 2018, MTNL reported widening of its loss to Rs 859 crore and the company’s total income declined by 21% to Rs 621.26 crore on a standalone basis. The employee cost accounted for 92.2% of the total income of the company and around 29% more than its revenue from operations at Rs 572.83 crore.

The annual loss of MTNL has been stagnant at Rs 2,970 crore during 2016-17 and 2017-18. Not only MTNL, its counterpart, Bharat Sanchar Nigam Limited also lacks 4G services across the 20 telecom circles where it’s operating. Although in recent times BSNL has launched 4G in some parts of the country, the pan-India rollout is awaited. Right now, the government is said to be delaying the allotment of 4G spectrum to both MTNL and BSNL. Once the telcos acquire 4G airwaves from the government, it will be a matter of time for them to launch 4G in the country.

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23 Comments on "Cutthroat Tariff War and Lack of 4G Services Hurting MTNL: Government"

 

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Tris_Vis
December 13, 2018 2:32 pm 2:32 PM

The govt and ministers know everything that is wrong, but and yet they didnt and won’t do anything for several years to resolve the same. Crony capitalism and vested interests at it’s best.

Nikhil Mumbai-Pune
December 13, 2018 6:23 pm 6:23 PM

+1

But I guess delayed auctions will help Avoid. People are really pissed off with Jio.

tri_vis
December 13, 2018 6:02 pm 6:02 PM

Above id is Not mine.
tri_vis is real, above is fake.

Avinash Meena
December 16, 2018 11:04 pm 11:04 PM

+1

DGupta
December 13, 2018 11:45 am 11:45 AM
These are excuses. Even before 4G, MTNL was making losses and losing subscribers. MTNL is overstaffed, and employees don’t care about MTNL’s health. They treat it as a purely govt department that you can keep getting your salaries from whether you work or not. Even the small set of working employees in MTNL can’t achieve results with this vast majority of chalta hai staff. MTNL should be sent to IBC, and BSNL can then pick it up at zero equity cost. At least BSNL’s scale benefits may reduce MTNL costs. If that does not look possible, just shut it down.… Read more »
Nasir Iqbal
December 13, 2018 6:10 am 6:10 AM

4G to BSNL/MTNL would mean loss to Jio. Govt can’t see his master to suffer losses.

Nikhil Mumbai-Pune
December 13, 2018 4:55 pm 4:55 PM

Spectrum getting wasted at BSNL. Band 5/3/41. I hope its new taken from BSNL immediately.

Kunal
December 13, 2018 11:26 am 11:26 AM
things were positive during 2009 to 2016 in telecom sector , Even that time, MTNL & BSNL were making losses when most private players were making good money . They were with technology that time . In fact ahead with government giving 3g spectrum first to bsnl/MTNL & latter to private players. Why should tax payers money be drained to over weight staff of public sector who enjoy premium benefits & job protection under political union goondaism . This is black mail. First Government should correct the fault & then only enter into further investments . We require BSNL/MTNL to… Read more »
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