story of MTNL for the last one year inf. through reliable sources

http://www.bsnlnewsbyashokhindocha.blogspot.com/ M-09426201999


You have been the CMD of MTNL for the last 1 year. How has been the journey?

The journey so far has been very fruitful. Change of role brings change in responsibility. Taking up the responsibility of CMD demands you to be more focused towards the entire company unlike a standalone job, where you look after only your area of service.

Performance-wise, we have grown faster than the industry. The industry grew at 2.13% in the third quarter, whereas we grew at 4%. Our broadband subscriber base has grown more than we estimated. However fixedline is on a decline which is quite natural because of the utility and convenience factor. Also human resources are being gradually justified, we have reached below 50,000 now which is helping our bottomline. The commercial launch of 3G was very satisfying.

BSNL and MTNL are the first operators to launch 3G services in the country. Are you satisfied with your progress?

When we launched our 3G services, the entire 3G ecosystem was new to India. Mobile phones capable of 3G offerings were not in the affordable range. Even still they are not affordable for masses. Content or value added services ecosystem was not ready. Even if service providers offer 3G services, there was not much content that a user would like to subscribe. The current state of VAS is not much different. Lack of awareness is also another important factor which hampered the desired growth of 3G. People still do not know what exactly to do with 3G.

However in the recent past we have seen major uptake in 3G services and subscriptions, mostly on the data front. Though I can't give you the exact number of our 3G subscribers, I can tell you the uptake in terms of data usage. Earlier the data usage in both our services areas was around 50 GB per day. But now, it has grown to 1,400 to 1,500 GB data usage in each city.

MTNL is the first one to float the idea of intercircle 3G roaming. How far has been the progress? Which are the companies showing interest and what is the business model?

It is certainly a nice and smart idea to have intercircle roaming. If a 3G customer of a certain operator moving to a different service where the operator does not have 3G service, then it is a restrictive practice. And you cannot stop someone from roaming. That is why we floated this idea to offer our service areas to the operators, who do not have 3G license in Delhi and MTNL. Many operators have shown interest and sent their requests to us. This way we can get an extra revenue stream for our unutilized resources.

For this model, we have asked for 20% revenue share and a fixed cost of `140 crore per city per year. We are very optimistic that something positive would turn out in this quarter.

How ready is the 3G ecosystem in India? What do you think the industry should do for its uptake?

I do not think the ecosystem is upto the mark as of now. There are many things to be done to a see a successful offering of 3G in our country. All the stakeholders of the industry like operators, VAS players, and device manufacturers should work in tandem to see the real fruit of 3G. Everyone should take up their responsibility in creating awareness regarding the service and its usabilities.

You have invested `6,564 crore on 3G spectrum and must have invested more on the infrastructure. You have been adding less than a lakh new mobile customers including 3G per month. When can MTNL recover its money?

Though I cannot tell you when will we recover our money, but we are very optimistic about it and working out plans to turn around the company. We have started seeing some momentum on this front. As mentioned earlier, if our roaming pact becomes successful which is quite a possibility, we expect around `500 crore revenue from that. Apart from this, our data usage has been growing beyond our expectations. We are planning to overcome some of our main bottlenecks like customer care and marketing.

Can you elaborate on these bottlenecks and how you plan to overcome that?

Certainly customer care is a tough challenge for all operators including us. Quality of service can be the only differentiator in the current scenario. At present, no one chooses an operator based on their tariff plans as tariff is already at the lowest possible stage offered by each operator. Can you expect a tariff rate of less than 1 paisa? Free of cost could be the next level! So customer care and quality of service can make or mar a brand now. We do acknowledge our drawback. We have been lacking in customer care and marketing. There is certainly much scope for improvement. To overcome this, we are in the process of outsourcing our customer care services. The plan is to create a separate arm for marketing and customer care activities. This will in turn take care of our outsourcing needs for the same.

Why is MTNL making losses? And what are you doing to increase your bottomline?

Running a private firm and running a public company are two very different situations. But when comparisons are made, they are made on 1 basis which is not always right. Our performance has always been very good but if you talk about losses on revenue, it is not because of performance. PSUs like us do not work just for profit and they do have some other obligations that private firms do not have. In terms of manpower, we have more employees than a private company of our size would have. Being a PSU, you cannot downsize your workforce at will to justify your bottomline or in times of difficult economic situations, which the entire industry faced in the last 2 years.

As I mentioned earlier, we are working on plans to turn around the company and we are working on those areas simultaneously. We are figuring out our bottlenecks like customer care and marketing, new revenue streams, etc. Customer care and marketing is being outsourced, manpower issues are being justified gradually and on new revenue streams, we are betting big on enterprise services. We are connecting around 86 CGHS hospitals in Delhi and providing our backbone to them. Though revenue from this is not that significant, but it is a continuous revenue stream without any investments from our side. We are also connecting all the police stations in Delhi through our IP-MPLS network to provide them seamless connectivity for voice, data, and video. We are also working on connecting universities of Delhi and Mumbai through our network. To make the devices affordable to our customers, we are working on partnering with many device makers like Nokia, Samsung, and Micromax. CWG, too, was a great experience for us.

How much have you invested on infrastructure rollout for both 3G and BWA? Are you satisfied with the Broadband progress?

Everyone knows how much we have invested for 3G and BWA spectrum, apart from that we do invest periodically and when it is required for our infrastructure and for our expansion. For example, during CWG 2010, we invested a good amount of money for our IP-MPLS network. And, not as CMD, but as a technical person I can easily say this is the best IP-MPLS infrastructure that India has so far deployed. As I said earlier, that we have seen a huge uptake in our broadband subscriptions in the recent past, and we reached around 1 mn users in this area. We had earmarked a capex investment of `1,281 crore for FY2010-11 and another `1,100 crore for FY2011-12.

What are the new things you have planned for the current financial year?

Plans are being formulated periodically and as per business needs. But yes, among new things, we are waiting for the MVNO policies which I believe would give us a momentum in reaching a different kind of customers. In MVNO, we are looking at tapping the young generation and a service with youth appeal coupled with our robust network would be a deadly mix for the industry. Apart from that, we are looking at entering wholesale business of broadband and BWA, and we are also looking at a franchise model for this business.

Lastly, has the role of an acting CMD come between your plans and their execution?

Not really. In fact it gives me a lot of flexibility. I believe a job is job and the responsibility remains the same whether you work fulltime, part-time, on additional job, or otherwise. As long as you work to justify the position, rest of the things are immaterial.