Bharti gives MTNL blues

As the country's largest private cellular company, Bharti Airtel, declared impressive results for the quarter ended September 30, state-run MTNL saw its profits slide by 25.53 per cent.

A few years ago, around the time that Bharti had listed, the story was different.

Bharti, growing but not yet into profits, was telling everyone to focus on EBITDA (earnings before interest, tax, depreciation and amortisation). In fact, its share price had fallen in the wake of the initial public offering. MTNL, at that time, was a company sharply focused on the two biggest markets "� Mumbai and Delhi "� and looked upon as a reasonable bet for investors.

Since then, there has been a dramatic reversal in fortunes. While Bharti, driven by promoter Sunil Bharti Mittal's entrepreneurial spirit and foreign direct investment, added circle after circle to its expanse, MTNL was not allowed by the government to grow beyond the two metros.

While Bharti identified mobile telephony as the wining horse, MTNL's mobile drive stuttered and sputtered.

And while Bharti added 41.1 lakh subscribers in the quarter ended September 30, this year, MTNL lost 68,000. According to telecom analysts, one of the biggest problems faced by MTNL is the government's decision to restrict it to just Mumbai and Delhi.

Another analyst pointed out that MTNL needed innovative and aggressive marketing strategies to compete, at a time when private operators are going out in vans to target customers even in rural areas.