The combined net profit of four listed telecommunications companies, Bharti Televentures, Mahanagar Telephone Nigam Ltd (MTNL), Videsh Sanchar Nigam Ltd (VSNL) and Tata Teleservices (Maharashtra), has declined 46.9 per cent to Rs 1,294.5 crore in 2002-03.
According to a report released by the Investment Credit Rating Agency (Icra), the operating income has also declined 4.3 per cent to Rs 13,764.7 crore. The operating income had increased 2.1 per cent during the previous year.
"The decline is caused by increased competition in the provision of services and a significant drop in prices of telecom services," said the ICRA report on the Indian telecom industry. The decline in the income of MTNL and VSNL more than offset the significant increase in income from Bharti and Tata Teleservices.
The operating profit of the four companies has declined 11.5 per cent during the year. On the expenditure side, operating costs of the four companies declined only 1.2 per cent to Rs 9,857.4 crore, even as employee costs increased 12.5 per cent to Rs 1,925 crore.
The increase in employee cost was lowest for VSNL at 0.9 per cent and highest for Bharti at 118.6 per cent.
Icra pointed out that the positive factor was the higher cash profits reported by the new operators, Bharti and Tata Teleservices, during the year.
Tata Teleservices cash profits aggregated Rs 123 million, compared to cash losses of Rs 348 million last year. Bharti Televenture's cash profits increased 123.6 per cent, even as MTNL's declined 16 per cent to Rs 17,781 million and VSNL's declined 39.7 per cent to Rs 9,268 million.
