The government on Friday said that a revival of the fortunes of state-owned MTNL is tough but not impossible even as it assured it will provide all possible help to resurrect the loss-making telecom firm.
“Revival of MTNL is tough but not impossible. The government will provide all possible support for its revival,” Telecom Minister Ravi Shankar Prasad said at a convention organised by MTNL Mazdoor Sangh on the revival of the public-sector firm.
Addressed the gathering of #MTNL Mazdoor Sangh Conference today in Delhi. pic.twitter.com/5BF7k5eNEE
— Ravi Shankar Prasad (@rsprasad) February 19, 2016
The minister also cited a turnaround at another state-run telecom firm BSNL, which posted an operating profit after many years.
Mahanagar Telephone Nigam Ltd (MTNL) posted a net loss of Rs 704.93 crore in the third quarter (Q3) ended December 31, 2015, while its total income during the quarter stood at about Rs 770 crore.
ALSO READ: MTNL Q3 net loss dips to Rs 704.93 crore
Prasad said both public sector firms BSNL and MTNL turned into loss-making units during the 10 years of UPA regime and added the telcos were in profits when BJP-led NDA government relinquished office in 2004.
The government this month provided a refund of Rs 492.26 crore to MTNL on account of liability arising out of the levy of Minimum Alternate Tax (MAT) towards its financial support.
The MTNL Mazdoor Sangh handed over a memorandum to Prasad over a report by IIM-Bengaluru that examined the financial situation of the company and suggested measures for a revival. The IIM-Bengaluru report has suggested that MTNL will not be in a position to continue the business beyond one or two years without government support.
The report has examined five options for MTNL’s revival —
- Raising equity from the market
Merger with BSNL
Sale of mobile division along with licence and all related assets
Surrendering 2G and 3G spectrum to government
The strategic sale by way of transferring 51% or more stake to a private entity.
The report has recommended two options —
- Surrender of the spectrum
Taking service of MTNL in Digital India in order of preference that government can consider.
“Our focus is on surrendering of the excess of 2G and 3G spectrum which government can put for auction and give MTNL money so that the company is able to lower debt burden. When MTNL exhausts its spectrum then further procurement can be done,” MTNL Mazdoor Sangh General Secretary Dharam Raj Singh said.
He said the telecom minister has assured MTNL employees that he will look into their request.
Singh said that MTNL Mazdoor Sangh has separately requested the minister to fill up vacant position at MTNL and appoint permanent Chairman and Managing Director of MTNL.
The government has given additional charge of MTNL CMD to Telecom Commission Member (Services) N K Yadav since June 2015. Before Yadav, MTNL director finance P K Purwar was given additional charge of the post after company’s CMD A K Garg retired on 30 May 2014.