MTNL eyes B2B business, corporate, govt clients to improve profitability

By: |
August 12, 2020 12:35 PM

State-run telecom MTNL is now looking to focus its services on corporate and government clients, and business-to-business as the debt-laden company seeks better profitability.

The decision was taken a few days ago as the government wants to cover the regions with 100% telecom coverage, so that the communication flow remains intact.Mahanagar Telecom Nigam Limited (MTNL) has decided to shift its focus from individual customers under a move to streamline services.

State-run telecom MTNL is now looking to focus its services on corporate and government clients, and business-to-business as the debt-laden company seeks better profitability. Mahanagar Telecom Nigam Limited (MTNL) has decided to shift its focus from individual customers under a move to streamline services, The Indian Express reported citing unidentified company officials. However, the PSU will keep operating its business-to-customer segments while focussing more on boarding corporate clients. With a total debt of Rs 20,000 crore, MTNL now looks to save costs and will try to make payments on its bank loans on time in order to avoid any default or paying penalties on interest payments, the officials added.

Both state-run Bharat Sanchar Nigam Limited (BSNL) and MTNL have been struggling for a while. Last year, the central government had approved a Rs 69,000 crore plan to revive MTNL and BSNL; under the plan, these two telcos were also merged. Employees at both the companies were also offered a voluntary retirement scheme (VRS) for which nearly 93,000 staffers opted.

It was expected that with 14,000 of its employees opting for VRS, MTNL’s employee costs would come down by up to 75 per cent. The company also deployed some other cost saving methods such as allowing its remaining 4,000 staff members to use their personal vehicles for official purposes. Employees can later claim reimbursements on the same to cut operation and maintenance costs of buying new vehicles or hiring them on lease. Moreover, the telecom has also chartered a bus to provide pick-up and drop facilities for its employees in Mumbai. “We want to cut costs at all possible points,” an official said.

In its Q4 results, MTNL reported standalone loss of Rs 623.63 crore which has narrowed down from the same period a year ago. The same can be attributed to the less number of headcount at the company after VRS.  The company had posted a loss of Rs 759.27 crore in the corresponding period a year ago.

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