Telecom Department Asks State-Run MTNL to Reveal Long-Term Roadmap as Part of Revival Talks

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. MTNL’s debt exceeds Rs 17,000 crore.

Purwar said a long-term direction for MTNL has to first take into account issues ailing the company.

MTNL Has Three Ailing Factors

“There are three ailing factors for the company. One is the employee wage bill. Secondly, the debt issues need to be taken care of, so that the company can work efficiently. The third is the investment in the network to create newer and modernised infrastructure,” he said.

Beyond that, there has to be a “top-level view” on whether a company in mobile or fixed line service can function on two circle operations — Delhi and Mumbai — when all other operators have “pan India traffic and pan India tariff.”

“It has to be about making the company suitable, such that pan India operation can be worked out…either through operational synergy with BSNL or entity-level synergy,” Purwar said but quickly added that a call on such issues is for the government to take.

“But, I will say synergy is certainly required for me. As a long-term player, being present in the telecom market in just two circles is not a viable proposition. Viability needs to be created by a synergistic approach, and BSNL, too, has a similar problem because they are not present in Delhi and Mumbai, which are two prime circles,” he said, as reported by PTI.

Once a household name, MTNL, which provides services in Delhi and Mumbai, has been relegated to a distant fourth operator in the market alongside Bharat Sanchar Nigam Ltd, another telecom PSU.

This was when, one billion subscribers-plus mobile markets in India – incidentally world’s second largest after China, is growing exponentially as private operators like Vodafone Idea Ltd, Bharti Airtel and Reliance Jio compete fiercely to lure subscribers with rock-bottom data tariffs and attractive offers.

The government in the past has categorically ruled out any plans to merge BSNL and MTNL, but has time and again talked of a strategic plan for promoting synergy among the two state-owned telecom firms.

“Merger is a promoter’s call, not a manager’s call. As a manager, I feel that operational synergy has to be there. If not, it will be difficult for both the organisations to continue to be competitive in the market in the long run…Because, you are creating a stack of cost to each other from a customer point of view, while other operators which are a single entity don’t have such costs,” Purwar said.