Telecommunications

December 8, 2006
For PSU telecom operators the game is in volumes

NEW DELHI -- “The game for BSNL and MTNL is now in the volumes,” said Dayanidhi Maran, Union ICT Minister after receiving their dividend cheques. The two together have paid Rs 1427 crores as dividend including what they paid earlier as interim.

BSNL registered an increase of 11.13 percent in revenues and a growth of 23.6 percent in profits. MTNL dividend works out to 40 percent of the capital of Rs 630 crores. The payments are for the financial year 2005-06. BSNL paid a total dividend of Rs 1175 crores and MTNL Rs 252 crores.

BSNL with a turnover of over Rs. 40,177 crores, is the largest telecom operator in the country. MTNL operates in the two metros of Delhi and Mumbai. The DoT has virtually shelved the earlier idea of merging the two into a single behemoth. “Let them compete with each other,” was the Minister's response when asked about the proposed merger. MTNL has also gone abroad with operations in Nepal and in a joint venture in some east African countries.

MTNL, while facing a severe competition in the two metros from the topmost private sector operators like Bharti, Reliance, Hutch, has still managed to expand its subscriber base to 6.13 million for both mobile and fixed lines.

“TRAI recently in a poll, judged MTNL as the best telecom provider with the lowest network congestion,” pointed out RSP Sinha, CMD, MTNL. It also claims to be the first company in Asia to introduce ADSL 2 plus technology Broadband and has gone on to launch cutting edge IPTV.

When corporotisation of the former DoT services were considered in 1990s, there were many fears expressed with employee unions even going on strike. The fear was that after paying corporate tax and other taxes as a corporation, the profits would shrink to negative level. All these fears have been proved to be unfounded. On the contrary, in a situation of steeply falling call rates and high level of competition with the private sector operators, both the corporations have consistently shown profits. BSNL CMD AK Sinha pointed out at the cheque presentation ceremony, that in the five years of its existence, the company has contributed more than Rs. 40,000 crores to the Government's kitty in the form of dividends, taxes and other payments. It is the largest service tax payer in the country. The Minister particularly mentioned the One Rupee per call for anywhere in India programme that BSNL is introducing in phases.