MTNL net dips by 38%

Posted on | April 27, 2006 |

For the year ended March 2006, MTNL registered a 38.3% fall in net profit to Rs 578.67 crore as compared with Rs 938.97 crore a year ago. Total income was down 4.9% for FY06 to Rs 5,785.57 crore as against Rs 6,084.10 crore last year.

While MTNL was allowed a tax refund of Rs 1,233 crore, only Rs 194 crore could be factored in 2005-06, said Anita Soni, director-finance.

She also added that the reduction in the price of leased circuits had resulted in the company losing Rs 92 crore, while ADC reduction led to the loss of Rs 329 crore.

MTNL is in a tight spot - it can’t expand outside Mumbai and Delhi and therefore can’t compete with nationwide service providers who benefit from scale of operations.

The company has also announced that it would form a subsidiary that would primarily look at ways to generate revenues from its real estate assets in addition to looking at ways to tap revenue streams such as expanding beyond Delhi and Mumbai and making the company a global one, Sinha said.

The company has set an ambitious target of increasing its network capacity by 2 million lines, which will be 3G-enabled by the end of this financial year. It also has plans to hike CDMA-based capacity to 8 lakh.

Source: Business Standard

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