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MTNL losses narrowed to ₹703Cr in Q4FY17; Cellular segment losses at ₹127Cr

State-owned telecom operator MTNL has reported a net loss of Rs 703.17 crore for the quarter ended June 2017 (Q1-FY17). Losses increased from Rs 634.8 crore in the preceding quarter. In the same quarter last year, MTNL had made a loss of Rs 718.02 crore. The company has been posting continues losses with a quarterly decline in income, especially after the launch of Reliance Jio’s unlimited calling and data offers.

The govt had earlier considered merging BSNL and MTNL in Lok Sabha in March this year to save the company from a possible shutdown. But the proposal now stands nullified: In a Lok Sabha reply this month, Minister of Communications Manoj Sinha said that “there is no proposal for merger of BSNL and MTNL”. The DoT instead classified MTNL as a ‘weak central public sector enterprise’ and has initiated revival/restructuring/closure road map for MTNL.

Some highlights from MTNL’s QFY17 earnings:

  • Overall operational revenue: 657.22 crore, a decline of 6% QoQ from Rs 705.17 crore in Q4FY16.  In the same quarter last year, MTNL posted overall revenues of Rs 813.45 crore.
  •  Basic (Fixed line and Broadband) revenue: Rs 556.67 crore, a decline of 5% QoQ from Rs 589.85 crore in Q4FY16, and down 9% YoY from Rs 612 crore.
  • Basic (Fixed line and Broadband) losses: Rs 296.57 crore in Q1FY17, compared to a loss of Rs 312.05 crore in the same quarter last year.
  • Cellular segment revenue: Rs 101.87 crore, a marginal decline from Rs 116.79 crore in the previous quarter. On a YoY basis, cellular revenues declined by 37% from Rs 163.01 crore in Q1FY16.
  • Cellular segment losses: Rs 127.01 crore, which decreased from Rs 140.19 crore in the previous quarter. In the same quarter last year, the segment posted losses of Rs 116.9 crore.

What MTNL is doing to cut losses 

  • Loan and liability waivers: The central government had provided financial support of Rs. 492.26 crore to MTNL this year, while pension payments to older MTNL employees were taken over by the central govt.
  • Infrastructure upgrade: MTNL is also in process of expanding its GSM/3G network in Delhi circle, which will help handle additional mobile traffic. It is also upgrading its 3G network in Mumbai to HSPA+, which is an enhanced version of the 3G standard.
  • Monetization of land and other assets: In February 2017, the Ministry of Communications informed the Lok Sabha that MTNL is exploring options to monetize its assets which may contribute to additional revenue. The company had a total asset base of Rs 17,656.35 at that time. It was also looking to create a “managed service model (in partnership) with BSNL for its mobile network.”

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