MTNL 4th Quarter Net Down 52% on High Staff Costs

Published on 4/30/2009 9:49:14 PM

State-run telecom operator Mahanagar Telecom Nigam Ltd (MTNL), which runs mobile and fixed line services in Mumbai and Delhi, on Wednesday reported a net loss of Rs 838 million for the fourth quarter ended March 31, mainly on increased staff costs in the period. Total income during Q4 of FY'09 declined to Rs 12.87 billion from Rs 14.48 billion of the same quarter of FY'08. Staff cost during the March quarter of FY'09 grew over two-fold to Rs 6.5 billion, compared to Rs 3.02 billion of the corresponding period a year ago in Q4 2007-08.
MTNL had around 4.1 million mobile or around 16% of subscribers in Mumbai and Delhi at the end of March 2009. There is not much scope for growth in its mobile business in these two cities as the market is close to saturation. Morever, MTNL has not been able to take on competition from the more aggressive private operators who continue to add more subscribers than the state-owned but stock exchange listed company does.
The operator has launched 3G services in Delhi and with Mumbai launch expected in May. However, 3G is unlikely to bring about a major change in the operator's fortunes. The company had a net profit of Rs 1.73 billion in the corresponding quarter of 2007-08, MTNL informed stock exchanges. "Staff cost during this year has gone up by Rs 4.61 billion, mainly due to merger of dearness allowance with basic pay, which was implemented with effect from January 1, 2007, MTNL said.
For the full year ended March 31, 2009, MTNL posted a net profit of Rs 2.14 billion, registering a 63.39% drop compared to Rs 5.86 billion of the same quarter a year ago. Total income during the FY'09 fell marginally to Rs 53.04 billion from Rs 53.29 billion of the previous financial year.