New Delhi: Loss-making state-run telecom firm MTNL has prepared a detailed roadmap, which suggests lowering of debt burden and annual investment of Rs 500 crore among other things, to make the company profitable by 2017-18.
"We have chalked out our plan and expect to become profitable again by 2018. As per our estimate, we need to invest around Rs 500 crore annually to maintain our market share. Major issues are finance cost, pension and spectrum issues which is expected to be resolved soon," MTNL Chairman and Managing Director A K Garg said.
The company has been registering losses since 2008-09. In 2012-13, the company recorded a net loss of Rs 5,321.12 crore. The annual revenue of the company stood at Rs Rs 3,428.6 crore in the same fiscal.
Garg said that company has seen increase in revenue in the past few quarters which is a step towards profitability.
"We are expecting resolution of pension issues which will give us benefit of Rs 2,000 crore annually," he said, adding that this is a part of the roadmap.
Overall, the salary and pension expenses of MTNL employees are estimated to form around 103 percent of the company's revenue.
The Department of Telecommunications (DoT) is believed to be in favour of a lumpsum payment of around Rs 5,925 crore to MTNL as pension benefits to the staff.
He added that MTNL is also focusing on reducing its debt burden and neutralise interest payment as part of its roadmap for profitability.
"We are paying annual interest of around Rs 1,200 crore. Once we get refund for BWA spectrum, we shall be able to lower our debt burden which is affecting our cash flow," he said.
MTNL was asked to pay Rs 4,533.97 crore on June 20, 2010, for the airwaves that are being currently used to provide 4G services in two service area- Delhi and Mumbai, where it operates. MTNL has offered to surrender its BWA spectrum it won 4,533.97 crore
Government has formed a Group of Ministers, headed by Finance Minister P Chidambaram, to look in to revival of the both BSNL and MTNL.
Shares of MTNL closed today at Rs 10.02 a share, down by 1.47 percent over its previous close on BSE.
First Published: Tuesday, September 03, 2013, 18:32