Mahanagar Telephone Nigam Ltd (MTNL), lobbying with the government to retain its Navratna tag, is unlikely to benefit much from the status, conferred on it in 1997.
Reason: the state-owned telecom operator, which reported a loss of Rs 4,109 crore in 2012, has failed to avail any of the facilities a Navratna enterprise gets.
Since it had received the status in 1997, MTNL, which operates in Delhi and Mumbai, has never taken advantage of any facility.
“We need to retain the Navratna tag. This is a status the government has conferred on us, based on the company’s performance over the years. We are working on strategic plans to turn a profit by March to retain the status,” said A K Garg, chairman and managing director.
MTNL has been reporting losses since 2009. This disqualifies it from being a Navratna. Losses for two consecutive years disrobes an entity of Navratna status. MTNL had posted a loss of Rs 2,611 crore in 2009-10 and Rs 2,802 crore in 2010-11.
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Navratna status empowers state-owned enterprises to invest up to Rs 1,000 crore, or 15 per cent of their net worth, in a single project without government approval. Also, these can spend up to 30 per cent of net worth in a single year, again without approval. But, the spend should not cross Rs 1,000 crore in a year. More, these can form joint ventures, alliances and also create subsidiaries in markets abroad.
MTNL has made presentations to the department of public enterprises, detailing plans as to how it would improve its finances.
However, there is no plan to invest in the recent future in existing geographies or abroad, added Garg. “We don’t have money for investments. But, will anybody gain anything by taking the Navratna tag from us?” he said.
As part of its financial restructuring, MTNL will first surrender the spectrum for broadband wireless access (BWA), for which it had paid a hefty sum of Rs 4,533.97 crore in 2010. “We did not ask for the BWA spectrum. We had got it as part of the government’s initiatives,” said Garg.
But, he pointed out that MTNL could not do anything with the spectrum, as it had no money.
“We have informed the department of telecom about this and have sought a refund,” he added.
Road to redemption
MTNL will “monetise” its surplus land across the country.
“We are exploring options on how all the surplus land, mostly in Delhi and Mumbai, can be monetised,” said Garg. However, MTNL will not sell any land, he said.
Financial performances of all Navratna companies are being reviewed by the government annually. There are 16 Navratna companies at present.
