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Mahanagar Telephone Nigam Limited

The other state-owned telco, MTNL, operates only in Mumbai and Delhi in India, and in Mauritius, so its scale of cash flow is significantly lower than that of BSNL.

The DoT is planning a Rs 30,600 crore financial aid to MTNL. The amount would be used to cut the firm’s debt and losses. A Rs 2300 crore VRS (voluntary retirement scheme) for its employees is also in the offing.

MTNL is planning investing Rs 190 crore to upgrade its services. This will enable it to install new base transceiver stations, among other initiatives. 4G spectrum may also be allotted to the state-run operator so that it may become a viable and a major player in the telecom sector.

Performance review


Mobile network. MTNL has undertaken the task of improving the wireless network in Delhi and Mumbai so as to improve the downlink speed of 21.1 Mbps and uplink speed of 5.76 Mbps which is presently of 3.6 Mbps and 384 kbps respectively with following major projects:

  • Expansion of GSM/3G RF network by adding 1080 3G sites and 800 hybrid microwaves to meet the backhaul capacity and data handling capacity to 10 Gbps and upgradation/replacement of the existing 3G network (720 node-Bs) and 754 existing 8 Mbps microwave hops to 400 Mbps capacity in MTNL Delhi.
  • The project implementation kicked off in 2017 with the following current status:
  • While 730 new node-Bs have been put on air, 470 sites have been upgraded in the year 2017-18;
  • 451 new microwave hops were commissioned while 518 hybrid microwaves have been upgraded/redeployed in Delhi in 2017-18; and
  • 160 node-Bs have been shifted to optical fiber backhaul.

3G network up-gradation of the existing 3G network (720 node-Bs) and 497 existing 8 Mbps microwave hops to 400 Mbps in Mumbai

The project implementation kicked off in 2017 with the following current status: 695 node Bs have already been upgraded for 21 Mbps speed

Redeployment of DSLAMs of the existing broadband network near the subscriber premises in Delhi and Mumbai thereby reducing copper length and enhancing the quality of broadband service. A total of 220 DSLAMs have been redeployed in Delhi and 174 in Mumbai. In the year 2017-18, 47 DSLAMs in Delhi and 23 in Mumbai have been redeployed thereby reducing copper length and enhancing the quality of broadband service. This has improved customer experience and reduced the number of complaints.

This year, MTNL finalized and made operational its new policy to engage partners on a revenue share basis to extend its FTTx services. 20 partners in Mumbai and 14 partners in Delhi have already started to provide BB over FTTH at speeds up to 100 Mbps.


Government-owned telecom operator MTNL continued to post losses. For the quarter ended June 30, 2018 it reported losses of Rs 943.38 crore. Losses widened by 4.7 percent from Rs 600.3 crore in the preceding quarter, while on a year-on-year (YoY) basis it increased by 34.16 percent from Rs 703.17 crore in the corresponding quarter last year. MTNL’s losses for 2016-17 were the same as that in 2017-18, Rs 2971 crore.

Total income recovered stood at Rs 607.7 crore, down 8 percent QoQ from Rs 660 crore in 4QFY18, and down 25.22 percent from a total income of Rs 812.7 crore in 1QFY18. Operating income also stood at Rs 492.3 crore for the quarter, the same as the preceding quarter, and significantly down 25.1 percent from Rs 657.2 crore in the same quarter last year.

Segment revenues

Basic (fixed line and broadband) revenue stood at Rs 430.8 crore, a decline of 2.3 percent QoQ from Rs 440.6 crore in 4QFY18. In 1QFY18, this segment had posted revenues of Rs 555.7 crore, representing a decrease of 22.5 percent as compared to this 1QFY19. The segment posted losses of Rs 372.8 crore, decreasing somewhat from losses of Rs 428.4 crore in the preceding quarter, and a loss of Rs 296.6 crore in the corresponding quarter last year.

Cellular segment revenues stood at Rs 62.6 crore, up 19 percent from Rs 52.6 crore in the previous quarter, and ~60 percent of the Rs 101.9 crore revenues posted in 1QFY18. The losses posted by the segment marginally decreased this quarter by 6 percent at Rs 177.1 crore, as compared to losses of Rs 168 crore in the preceding quarter. However, losses widened on a YoY basis, as the segment reported a loss of Rs 127 crore in 4QFY17.

Government’s indecision on MTNL

It is worth noting that the government had, last year, considered merging BSNL and MTNL in the Lok Sabha to save the company from a possible shutdown. But later in a Lok Sabha reply in August 2017, Minister of Communications Manoj Sinha said that “there is no proposal for merger of BSNL and MTNL.”

Earlier, in February 2017, the Ministry of Communications had informed the Lok Sabha that MTNL is exploring options to monetize its assets which may contribute to additional revenue.


Although MTNL is meeting most of TRAI’s QoS parameters, the network needs immediate upgradation/expansion. The CapEx is continuously declining over the period. Investment of Rs 2000–2500 crore is required over next 2-3 years for upgradation and expansion. The company has planned to upgrade its 3G network in Delhi and Mumbai and managed to incurred CapEx of more than Rs 500 crore (including 3G network upgradation) during the year ended up to 31-03-2018 with the help of borrowings only. However being in a debt trap of Rs 17,720 crore as on March 31, 2018 (excludes Rs 4533.97 crore of the bonds, the liability for interest and principle of which are with the Government of India), it is a great threat for the company to meet the CapEx as well as OpEx requirements. Hence MTNL should take necessary steps to meet the quality of service parameters to raise the quality of service and thereby revenue/customer retention.

MTNL’s 2G/3G network in Delhi and Mumbai is quite old. With the passage of time, new technologies are introduced in the market by manufacturers/operators to meet the customer aspirations and demand. Accordingly, the maintenance supports for legacy/old equipments poses a big challenge for any operator. MTNL is also facing difficulty in getting maintenance support from various manufacturers of 2G/3G network equipment. The Validity of the Cellular License is also approaching its due date, that is April 05, 2019, if the extension request of MTNL is not considered by the government.

Following immediate technological upgradation/expansion for improvement of service and keeping the QoS intact, expansion/up-gradation of MW backhaul, 3G network up-gradation in Delhi and Mumbai, expansion of GSM/3G RF network, migration of legacy TDM network to IMS, extending reach of FTTH, and taking fiber to the HUB/near the subscriber are required. An investment of Rs 2000–2500 crore would be needed over next 2-3 years for this upgradation and expansion. However being in a debt trap, it is a great threat for the company to meet the CapEx requirement.

Since MTNL has incurred losses continuously since financial year 2009-10, it has been declared as incipient sick as per the guidelines of Department of Public Enterprises (DPE). Accordingly, action has been initiated by the Department of Telecommunications (DoT) for preparation of revival/restructuring plan of MTNL. Details are:

  • Refund of surrendered BWA (broadband wireless access) spectrum in two service areas held by MTNL. Under this head, Rs 4533.97 crore has been refunded to MTNL through bonds;
  • The pension liability of MTNL staff who were absorbed from Department of Telecommunications (DoT), has been taken over by the government;
  • Financial support of Rs 492.26 crore has been given to MTNL on account of liability arising from levy of minimum alternate tax (MAT); and
  • Refund of Rs 458.04 crore to MTNL on account of surrender of CDMA (code division multiple access) spectrum.

There is provision of high-speed internet on fiber to the home (FTTH) and Wi-Fi at the residences of MPs. The project cost of Rs 43.2 crore was funded by DoT.

“An asset monetization program is being thought about, wherein excess assets can be monetized. However, the assets are owned by multiple entities – MTNL, DoT, and the government. The DoT is fine selling off the assets it holds, however the proposal will have to be taken to the cabinet.”

Manoj Sinha
Minister of State for Communications

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