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MTNL Losses Down 37% QoQ To Rs 1256.19 Cr For Q1-FY14

mtnl

Mahanagar Telephone Nigam Limited (MTNL), the state run telco operating in Delhi and Mumbai, has reported yet another quarter of losses: it lost Rs 1256.19 crore for the quarter ended June 30th 2013, up 18.59% year on year, although losses are lower by 36.75% as compared with last quarter. Net operating income was at Rs 883.16 crore, down 3.86% quarter on quarter, but up 6.02% year on year. Total expenses were up to Rs 1870 crore, as much as 30.53% higher than last quarter, and 209.54% year on year the same quarter last year. The telco, however, saw a significant increase in its losses during the quarter, reporting Rs 1,985.9 crore loss, a 68% increase from Rs 1,182 crore loss in the previous quarter and a 44.48% increase from Rs 1,374.5 crore in the same quarter last year.

Basic (Fixed line) services still account for a majority of MTNL’s revenues: 75.78% of the companys Rs 889.47 crore revenue (including inter-segment revenue, hence higher than net revenue reported earlier) came from basic services, as opposed to Rs 215.4 crore from cellular.

mtnl-q1-fy14

As of April end 2013, MTNL held 0.56% of the cellular services marketshare, with 4.89 million connections (and only around 2,114,668 of these active), but had 11.84% of the wireline marketshare, with 3,551,484 connections. Surprisingly, its wireline base grew in April 2013.

No operational information has been shared by MTNL on its terribly outdated financials page, but earlier this year, Kapil Sibal, the Minister of Communications and Information Technology, had attributed the rising losses to Fixed to Mobile substitution, increasing staff expenditure due to a large legacy work force, stiff competition in the mobile sector, payment towards 3G and BWA spectrum charges and a decrease in the average revenue per user (ARPU). He had suggested that steps had been taken to improve the profitability of MTNL, but we’ll have to wait a few quarters to see if there is any tangible, sustainable improvement. Steps taken to improve performance include commissioning Convergent billing which will provide a single bill for all services to a subscriber, reviewing tariffs of existing products and services, rolling out measures to facilitate easy payment of telephone bills and providing an online system for subscribers to book different services and file complaints for landline and mobile services.

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Written By

Founder @ MediaNama. TED Fellow. Asia21 Fellow @ Asia Society. Co-founder SaveTheInternet.in and Internet Freedom Foundation. Advisory board @ CyberBRICS

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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