Mtnl Likely To Get Pan-india Mobile Licence

[@ksh@T 20]

NEW DELHI: The government may allow one more state-owned national level mobile operator, in addition to BSNL, to tap the country’s booming telecom market and also compete more effectively with private telcos. The Department of Telecom (DoT) is considering a proposal to allow MTNL to become a pan-India operator. DoT has not taken a final decision on the issue yet.

However, sources say that MTNL has already submitted a plan towards this to DoT, but MTNL’s top brass refused to confirm or deny the development. At present, state-owned BSNL operates cellular services all over the country, except in Delhi and Mumbai, where its sister company MTNL provides communication services.

It is learnt that the communications ministry is in favour of allowing MTNL to expand beyond these two circles, in a bid to improve its falling profits.

Besides, the communications ministry has also been pushing for increased competition in mobile telephony services, to bring about a further reduction in cellular tariffs.

According to sources, DoT had asked MTNL to submit a list of proposals, including the option of expanding to other telecom circles, as the PSU has been losing momentum in the two metros.

This is because MTNL is confronted with falling landline numbers, even as its efforts to scale up its cellular operations have been restricted by the fact that the two metros are nearing saturation.

This has been reflected in MTNL’s poor performance for the last several quarters. For instance, even as all private telcos and state-owned BSNL are registering record growth and impressive profits, MTNL had posted a 13.7% decline in net profit during the last quarter.

For the quarter ended September 30, 2007 its profit declined to Rs 94.78 crore, against Rs 109.92 crore in the same quarter last year, while its total income at Rs 1,345.31 crore was 1.4% less than Rs 1,365.24 crore in the corresponding period last year.

The company has posted a basic and diluted earnings per share (EPS) of Rs 1.50, less than Rs 1.74 of last year. The dip in net profit and income was largely due to the 4.8% decrease in income from basic services in the quarter and increase in administrative expenses.

Additionally, MTNL’s bid to expand operations abroad have failed to take off. The company lost all its bids so far for mobile licences in countries like Saudi Arabia, Kenya, Qatar and Sri Lanka among others in the last two years. Earlier, in 2006, MTNL had sought DoT approval to expand outside the two circles, but the then communication and IT minister Dayanidhi Maran had rejected the proposal.

Sources also said that if DoT were to allow MTNL to take a pan-India licence, it would also be forced to allow BSNL to operate in Delhi and Mumbai to ward off turf wars between the two.

BSNL too had approached the DoT in 2006, seeking its approval to launch services in Delhi and Mumbai, but could not go ahead as Mr Maran was against this.

[Honest 836]

^^^

My dear friends, if MTNL gets the license then surely we all must be ready for frequent call drops and voice breaks as MTNL's mobile network stands nowhere in front of other private networks.

Regards.