Lok Sabha Question No. 932 (UNSTARRED), answered on 2017-02-08
Subject: Revival of MTNL
Ministry: COMMUNICATIONS
Asked by: RAM CHARITRA

## GOVERNMENT OF INDIA MINISTRY OF COMMUNICATIONS DEPARTMENT OF TELECOMMUNICATIONS

## LOK SABHA UNSTARRED QUESTION NO.932 TO BE ANSWERED ON 8 TH  FEBRUARY, 2017

## REVIVAL OF MTNL

932.   SHRI RAM CHARITRA NISHAD:

Will the Minister of COMMUNICATIONS be pleased to state:

- (a) whether the MTNL has been witnessing continuous reduction in profits since 2009-10;
- (b) if so, the details thereof and the reasons therefor;
- (c) whether  the  MTNL  has  submitted  a  revival  plan  to  the  Government  and  if  so,  the details thereof;
- (d) whether MTNL is considering partnering with State run BSNL to provide equipment for its mobile services in Delhi and Mumbai as managed service provider on a revenue sharing basis and if so, the details thereof; and
- (e) whether the PSU is also targeting revenue worth Rs. 1,000 crore in two years from asset monetization and if so, the details thereof?

## ANSWER

## THE MINISTER OF STATE (IC) OF THE MINISTRY OF COMMUNICATIONS & MINISTER OF STATE IN THE MINISTRY OF RAILWAYS (SHRI MANOJ SINHA)

- (a) & (b) Mahanagar Telephone Nigam Limited (MTNL) has been witnessing continuous reduction in profits since 2009-10.  Details of profit and loss of MTNL from 2009-10 to 201516 is as given below:

Profit / (Loss)

|   Sl.No. | Financial Year   | Profit / (Loss) (in Rupees Crores)   |
|----------|------------------|--------------------------------------|
|        1 | 2008-09          | 211.72                               |
|        2 | 2009-10          | (2610.97)                            |
|        3 | 2010-11          | (2801.91)                            |
|        4 | 2011-12          | (4109.78)                            |
|        5 | 2012-13          | (5321.12)                            |
|        6 | 2013-14          | 7825.13*                             |
|        7 | 2014-15          | (2893.39)                            |
|        8 | 2015-16          | (2005.74)                            |

* In  2013-14,  MTNL  made  profit  due  to  payment  of  pension  amount  and  writeback  of amortization of Broadband Wireless Access (BWA) Spectrum amounting to Rs.11,620.93 crores.

Reasons for losses of MTNL since 2009-10 is due to:

1. MTNL incurred losses in 2009-10 on account of amortization of 3G/BWA (Broadband Wireless Access) spectrum charges, 2nd wage revision leading to higher payment of wages to employees and provision for pensioner benefits as per actuarial valuation based on the revised pay scales for retirement benefits of employees.
2. 3G/BWA  spectrum  was  purchased  for  Rs.11097.97  crores.  MTNL  arranged  this amount through loans from banks etc., to the tune of Rs.7563.97 crores. The payment of one-time spectrum charges from borrowing and cascading effect of wage revision has resulted in considerable interest outgo for MTNL from 2010-11 onwards.
3. (c) In  2012-13,  M/s  Deloitte  was  engaged  as  a  consultant  to  prepare  a  revival  plan  of MTNL.  Based on M/s Deloitte recommendations discussions at various levels of the Government  including  Group  of  Minister  were  held. Action  on  some  of  the recommendations initiated by the Government were:
4. (i) Payment  of  pensionary  benefits  with  effect  from  01.01.2000  to  government employees absorbed in MTNL.
5. (ii) Financial support equivalent to upfront charges paid by MTNL  for  the surrendered BWA spectrum.
6. (d) MTNL  is  exploring  managed  services  model  with  Bharat  Sanchar  Nigam  Limited (BSNL) for its mobile network.
7. (e) MTNL is exploring the monetization of its assets which may contribute to its revenue.

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