With revenues from the mobile segment not increasing at a fast pace, state-run Mahanagar Telephone Nigam Ltd has started focusing on the enterprise and wholesale segment and expects to clock a revenue of Rs 500 crore in the current financial year from here.
From this year, MTNL will start its wholesale business, wherein it will share a part of its network with private companies, chairman and managing director Kuldip Singh told Business Standard. In 2010-11, it earned Rs 350 crore from the enterprise segment.
As part of its wholesale business, it had already invited an Expression of Interest for roaming agreements for 3G services. Tata Teleservices and Aircel had applied and a final decision will be taken within a month. It is also working on leasing its bandwidth to private players in Delhi and Mumbai, Singh said.
“The mobile segment is growing in terms of numbers but to continue growing in this, we have to continue to bring down tariffs (rates). Tariffs have still not stabilised and revenues are not really increasing, it is under a lot of pressure. But there is a huge growth in revenues from the enterprise and broadband segment,” he said.
The high growth in this segment had helped the company raise revenue from the other services segment by 60 per cent to about Rs 10,442 crore for 2010-11.
Aiming to synergise operations with the other state-owned telecom company, Bharat Sanchar Nigam Ltd, which offers services in the rest of India, excepting Delhi and Mumbai, it has proposed to make Millenium Telecom Ltd (MTL) a marketing and customer care arm for the enterprise segment of both MTNL and BSNL. MTL is a joint venture company of MTNL and BSNL, with each having 50 per cent equity. It offers international long distance operations and has also set up a submarine cable system. MTL will also offer one window for billing to enterprise customers of both MTNL and BSNL.
Increased competition and dipping rates have hit the overall sector. But BSNL and MTNL have been losing revenue and market share at a faster pace than others. The two together have only 12 per cent of the mobile market.
Due to the declining financial health of both PSUs, the department of telecommunications (DoT) had asked them to synergise operations. For the first time since its inception in 2000, BSNL posted a loss of Rs 1,823 crore in financial year 2009-10. MTNL had recently reported a net loss of Rs 2,826 crore, while total income rose to Rs 3,841 crore during the last financial year. Its net continued to be dragged down by retirement benefits, an increase in dearness relief for pensioners and wages.
