MTNL managed to eke out a small gain, after plunging on opening, despite coming out with rather poor results.
At the current juncture, the scrip of the state-run Telco was higher than its Wednesday's close by 0.6% at Rs 91.90 on BSE. The scrip had dropped a steep 7% to Rs 85 on opening. Around 312,000 MTNL shares changed hands on BSE in just a few minutes of trading.
Increasing competition from new entrants in the telecom sector has depressed fortunes of the scrip of late. And, the scrip has not been able to hold on to brief rallies, seeing a consequent decline each time. From Rs 173.85 on 15 February 2003, the scrip has slumped 52.7% to a multi-year low of Rs 82.20 on 14 January 2003. It has moved in a band of Rs 90-110 thereafter.
MTNL reported a sharp fall in its Q4 ended 31 March 2003 net profit. For Q4, MTNL reported a 55.8% drop in net profit to Rs 183.62 crore (Rs 1.83 billion) compared to Rs 416.17 crore (Rs 4.16 billion) for the quarter ended 31 March 2002. Total income moved slightly higher by 0.8% to Rs 1,437.91 crore (Rs 14.37 billion) from Rs 1,426.31 crore (Rs 14.26 billion).
Net profit was hurt by a provision for revenue sharing charges of Rs 461.93 crore (Rs 4.61 billion) compared to a credit of Rs 88.62 crore in the corresponding period last year. MTNL said that pending the finalisation of an interconnect agreement with BSNL, revenue sharing has been worked out as per the formula applicable to others.
For FY 2002-03, MTNL posted a 31% fall in net profit to Rs 897.49 crore (Rs 8.97 billion) compared to the Rs 1,300.67 crore (Rs 13 billion) in the previous year. Total income dipped 5.7% to Rs 6021.69 crore (Rs 60.21 billion) from Rs 6392.07 crore (Rs 63.92 billion).
MTNL provides fixed line telephony services in the metros of Mumbai and Delhi. These two cities account for around 5 million MTNL landlines, contributing significantly to the company's revenues. But the basic telephony major has been hit by increasing competition from cell phone operators as also as a result of RIL's aggressive foray into WLL services.
To cope with the increasing competition, MTNL has spruced up its sales and marketing activities. It is also retraining its workforce to be more sensitive to customers' needs. For this purpose, it has hired advisory company Accenture.
MTNL is also focusing on offering value-added services such as e-commerce, m-commerce, IN-based services and services based on geographical positioning systems.
With effect from 1 May 2003, MTNL reset tariffs, slashing the number of free calls, retaining the three-minute pulse for local calls and keeping unchanged overall monthly rentals.
MTNL has decided to offer three alternative packages which retain the three-minute pulse for local calls.
The monthly rental for the first plan has been retained at Rs 250 per month and call charges too have been retained at Rs 0.80 up to 300 calls and Rs 1.20 up to 2,000 calls. In the second package, the rental would be Rs 280 with additional value-added features like free abbreviated dialling service, call transfer facility, three-party conference and e-mail on phone service.
The third package is for heavy users and offers 2,000 free calls for a monthly rental of Rs 2,000. In order to encourage customers to make more calls, the call tariff has been reduced from Rs 1.20 to Re 1 for over 2,000 calls.
BSE code: 500108
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