ADC repeal to shave off Rs 350cr from MTNL revenue in FY06

MTNL is likely to take a Rs 350 crore hit in revenue in the current fiscal on account of withdrawl of access deficit charge (ADC) paid by private operators from February this year, according to the performance MoU signed by MTNL with the government.

The telecom PSU's gross sales for 2005-06 is pegged at Rs 5,551 crore, according to the MoU. The MoU for 2004-05 pegged the gross sales target at Rs 6,154 crore.

The net profit target set by the PSU for 2005-06 stands at Rs 392 crore. The cumulative net profit of MTNL, as on December 2004, stands at Rs 633 crore.

"The financial figures takes into account the reduction in revenue to the tune of Rs 350 crore on account of withdrawal of ADC to MTNL from February 2005, and the general reduction in tariff due to competitive pressures," the MoU said.

MTNL is planning to provide 7.6 lakh new connections in 2005-06 as per the MoU comprising fixed line, WLL and cellular services. The company had a target of 4.5 lakh new connections for 2004-05.