Mtnl-Mumbais Own Telecommunication Services

MTNL was formed with the objective of upgrading the quality of telecom services to international standards to build a high degree of customer confidence and to increase the accessibility of telecom services to the common man.

GROWTH OF MTNL NETWORK

From the very inception of MTNL, emphasis was on expanding and modernising the telecom network of both Mumbai and Delhi. Thus it was only planned to eradicate the waiting list but also to modernise the services.

MTNL accounts for nearly 25 % of the market share of the National Telecom Network.

At present the company has been increasing the telephone lines at the rate of 2.5 lakh per year. But following the liberalisation and with the coming up of competitions, it has plans to increase the number to 4 lakhs lines per year.

 

The table below depicts the comparative analysis of some of tha major parameters as existing at the time of formation of MTNL and their groth as on 1.4 1998 in Mumbai.

Number of exchanges 69 on 1.4.86, 32 in 1998

Euipped capacity 5,42,400 in 1986 20,36,586 in 1998,

Direct Exchange Lines 4,53,989 in 19986, 18,27,510 in 1998

Waiting List in 1986 was 1,84,557 and in 1998 was nil

Waiting time was 5 to 8 years and in 1998 it is 2-4 months

In order to improve the quality of the services the MTNL has been replacing existing electro mechanical exchanges by new digital electronic exchanges. To improve the performance of junction network more than 1600 kms of optical fibre cable has been introduced. Today all the wire centres have been linked by obticle fibre cable.

To make inter exchange junction network more reliable it is planned to upgrade the existing optical fibre PDH system by synchronised Digital hierarchy (SDH ) systems.

In order to avoid frequent digging of roads to lay underground cables, MTNL has planned extensive network of ducts in the city. To date more than 825 kms of duct network has already been constructed.

Financial Strenghth

With the increase of exchange capacities from 8,79,200 to 37,07,466 and DELs from &,46,658 to 32,61,613 as on 28.3.98, revunue of MTNL has also increased manifold from Rs.541 crores to Rs. 4017 crores as on 31.03.97.

Telecom giant MTNL has been on the top of the list of FII favourites for quite some time now. It has an assured rate growth and no private operators is in a position to compete with the near future.

It is the only basic telecom telecom service provider that is listed on the courses. MTNL happens to be the 5 th among the top 10 enterprises during 95-96 (MTNL Rs. 1248.09 crores) MTNL was a top 10 enterprises in terms of contribution to the central exchequer in 95-96. MTNl recorded a turnover of Rs. 3960.50 crores for the fiscal ended March 97 as compared to Rs. 3448.12 crores in 1995-96. It is posted at 21.6 % in its net profits upto Rs 887.13 crores from 729 crores in 1995-96. MTNL also has high annual cash flows and cash generated from operations was Rs. 13377 crores in 1996-97.

As on Dec. 3 1997 MTNL has amarket capitalisation of Rs.139.4 billion. The company recorded a 21.2 % growth in net profits to Rs. 529 crores for the first half of 1997-98. Total revunue registered a growthof 13% to Rs.2,241 crores in the same period this year. The return on capital employed stands at an impressive 25.5%.

Next to VSNL, MTNL is the other PSU to top GDR market and the GDR issue was oversubscribed three times mopping up a phenomenol $ 358 million ( Rs. 1,410 crores) and that two at a marginal premium to the market price Rs. 235 % per share.

MTNL has been awarded the NAVRATNA status by the government of India which allows it greater financial and managerial autonomy and is expected to decrease response time and operational flexibility.

The government stake has already come down from 62% to 54% with the latest GDR. THis will ultimately drop to 51%. The government share of the proceeds ($233.18 million) has been repatriated. MTNLs share ($ 174.53 million including green shoe option) has been deposited with SBI, London in dollar accounts aand will be brought in as and when needed.

MTNL has extended its revunue sharing agreement with Dot on terms favourable to MTNL till March 2000 ( approximatel 22.5 % of the revunue is payable to DoT interconnection charges and Rs.900 per ALIS (access lines in service) as annual licenense fees till 2000). Moreover MTNLs license for operating basic telecom services has been extended by 15 years upto 2012.

MTNL has already entered into a joint venture with Telecom Consultants of India Ltd. (TCIL) for entering basic services outside Delhi and Mumbai.

Introduction of new services in Mumbai city.

In the last few years MTNL has introduced a number of services. The Voice Mail and Radio paging services were introduced in 1992. In 1996 the ISDN services were introduced which enable provision of Videoconferencing facility to the subscribers. To improve the performance of manually booked trunk calls, the CDTMX ( computerised Digital Manual Trunk exchange has been commissioned.

Since the waiting lists has nearly been wiped out from the network, MTNL is planning to provide Telephone onDemand from this year onwards.

Development Plans

Basic services being its core business, plans are afoot to invest Rs2000/- crore to modernise and upgrade MTNLs networks to global standards. Plans are ready to boost access network though installing optical fibre in local loop and wireless in local loop technology and also enhancing the existing copper based network by digitalising wih HDSL &ADSL. Around 90% of its exchanges are digitalised and the company expects to ahcieve 100% digitalisation by 2002.

MTNL plans to ivest Rs 10,000 crore in the next 5 years. By 2002 it hopes to icrease the number of lines from 3.2 million to 5.9 million. The target for penetration levels is to reach 18% from todays 12% . The money for this plan will come from GDR proceeds (5