State-run Mahanagar Telephone Nigam Ltd (MTNL), which offer services in Delhi and Mumbai, has planned a slew of measures to put the company back into the track. The measures include an overall brand revamp of the public sector undertaking, improve customer care and marketing services and come out of losses within two years. Kuldip Singh, who has been holding the temporary charge of chairman and managing director for one and a half years, talks about the plans in an interview with Mansi Taneja. Edited excerpts:
‘We expect to be back to profits in two years’ First, in your results for 2010-11, you have managed to reduce the losses as well as expenditure. Your revenues from other services have registered a 60 per cent increase. How did you achieve this?
We are aggressively focusing on enterprise business. We did a few projects last year and hope to get more this year. It is the highest-growing segment for us right now. The mobile business is growing in term of numbers, but to continue growing in this segment; we have to bring down tariffs. Revenues from this business are under a lot of pressure, as tariffs have still not stabilised and revenues are not really increasing. But there is huge growth in revenues from enterprise and broadband segments.
Our net loss stood at over Rs 2,800 crore for 2010-11, against Rs 3,063 crore in the previous financial year. We expect to overcome our losses in 2012-13, provided issues related to pension and the voluntary retirement scheme are sorted out.
Your expenditure has also come down drastically. Staff costs have gone down. How?
I have always been saying we are an organisation which is overstaffed. A few years ago, our staff strength was 60,000, which has come down to 45,000. Technology has also changed. Earlier, we needed phone mechanics, more linemen; such requirement is decreasing now. So, what we are doing is that we are reducing staff. By natural attrition, people are also retiring.
The main thing is the wage bill has come down despite a revision in wages. We incurred a wage bill of Rs 1,704 crore for the year ended March 2011, against Rs 1,968 crore for the previous financial year. The pension bill increased to Rs 340 crore in 2010-11, against Rs 261 crore a year ago.
If you see it combined, it has come down. Moreover, we are providing 1200 crore for retirement benefits. But if our wage bill is coming down, we will not need this provision. This will remain a book provision. We have an operational loss of Rs 1071 crore, so if we discount this provision, practically there is no operational loss. However, this is a not a cash outflow.
What is the update on your Wimax plans. Are you now looking towards the other technology?
Last time, when we had called an expression of interest for franchisee of Wimax, only one company had shown interest. Now, we have appointed PricewaterhouseCoopers as our consultant, which will advise us. Most probably, we will make it technology-agnostic.
In technological terms, Wimax is 3.9G and long-term evolution (LTE) is 4G. There is a small gap that it can offer more speed. LTE is an evolution from the GSM side. Three years ago, Wimax would have been the best choice but unfortunately that at time devices, standards were not ready…still devices are a challenge. Now when LTE is round the corner, at this stage it becomes a very big decision whether to go for LTE or Wimax.
What are your views on the proposed merger of MTNL and BSNL. Have you already started synergising operations with BSNL?
More important is to bring a synergy between the two and give people a feel of one network, which will also be the objective of the merger. If we can achieve synergy without merger, there is nothing like it. But if required, we are not averse to the idea of merger but there are many practical issues. Discussions are on for synergising our operations with BSNL. We are proposing to use Millenium Telecom, a joint venture of BSNL and MTNL, as the marketing and customer care arm for enterprise and wholesale customers.
Are you looking to acquire any new licences overseas, especially in the African market?
In Africa, it is a challenge to get licence. We want to be a long-term player. We have a company in Mauritius, which is a profitable entity now. We are not floating any equity as we are a serious player. We offer CDMA-based mobile services there and will launch the GSM service soon. If there are more new opportunities, we will look into it.
