Will MTNL afterall be able to dial OP for operationally profitability

Striving hard in competing with the private players, the state run telecom major MTNL has posted a net profit for the first time in  Q4FY16 but has however failed to pull back its operation revenue on the green mark. Total operational revenue of MTNL has decreased 4.26 per cent to Rs 835.79 crore for the quarter, from Rs 873.01 crore in the same quarter last year.

State-run telecom operator MTNL had posted a net profit of Rs 174.58 crore after surrendering 800 MHz of CDMA spectrum for Rs 428.95 crore in March 2016. MTNL has seen a continuous streak of losses since Q1 FY15. In the preceding quarter, MTNL has reported a loss of Rs 704.93 crore and a loss of Rs 595.11 crore in the same quarter last year.

Amid competition from the major private sector giants, the company aims to be operationally profitable by 2016-17 and completely profitable by 2017-18. 

The company will majorly focus on its primary telephone business and will take help from BSNL for providing assistance for its mobile business. The company is looking at BSNL to provide equipment for its mobile services in Delhi and Mumbai circles as managed service providers on a revenue share basis model.

MTNL is also looking to expand its basic or fixed services network in partnership with private players on a revenue share basis model.

The company’s balance sheet has remained strained since 2010 when it paid 11000 crores for the 3G spectrum and for providing broad band services.

The shares of the company on Thursday are trading at Rs 19.45, up by 1 per cent. In this fierce competition of telecom operators, it could be interesting to see if MTNL can atleast emerge as a competitor.