MTNL Cellular Revenue Down 9.7%; More Dialup Connections Than Broadband

This is not very encouraging: according to data published by MTNL, the second largest ISP in India, it had more dialup connections than broadband, in the cities of Delhi and Mumbai. Only 890,640 of MTNL’s total Internet subscription base of 2,369,149 uses broadband; a majority 1,478,509 of them still use dialup. MTNL operates only in the metro cities of Delhi and Mumbai. Is a majority of India’s broadband usage coming from outside Delhi and Mumbai, the two most expensive circles for 3G and BWA? MTNL also reported that its broadband ARPU for the quarter declined to Rs. 571, down Rs. 22 from the previous sequential quarter. The total number of broadband connections being delivered by MTNL increased by 33,666; in comparison, it had added 41,144 broadband connections in the previous quarter. Really, it’s time to open up the last mile, before more and more wireline connections are turned in. During the quarter, MTNL’s wireline connection base declined by 10,636.

Financial Results

MTNLs Cellular segment revenue declined year on year to Rs. 161.7 crore for the quarter, as compared to Rs. 165.9 crore in the previous sequential quarter, and Rs. 174.9 crore in the same quarter last year. The cellular business reported results (loss before tax and interest) of Rs. 141.295 crore. This is tiny, given a loss of Rs. 484.29 crore for the wireline segment.

For MTNL as a whole, the net loss for Q2-11 was Rs. 604.89 crore, compared with Rs. 451.43 crore loss the previous quarter, and a profit of Rs. 21.3 crore for the same quarter last year. The loss is being attributed to one time charges on account of 3G spectrum and BWA liability of Rs.11097.97 crore, for which Rs. 157.61 crore has been amortized for the quarter. An amount of Rs. 302 crore is accounted for by MTNL “towards wet lease for infrastructure and other services provided by MTNL in respect of Commonwealth Games”.

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