Fiscal 2001-02 was significant for MTNL in many ways. It recorded a turnover of Rs 6,147.1 crore, as income from services registered a growth of 6.3 percent over the previous fiscal’s income of Rs 5,784.6 crore. Despite registering a growth in overall revenues, the company registered a negative growth of 5.27 percent in profits. As compared to the previous fiscal, when its earned profits of Rs 1,540.2 crore, this year the profits stood at Rs 1,458.8 crore.

Two major factors contributed to the decline in profits—the second phase of tariff re-balancing and the huge tax liabilities that MTNL had to bear with due to its license fee obligations to the government. Last year, profit before tax was Rs 1,720.2 crore as against this year’s Rs 1,985.8 crore.

Fiscal 2001-02 saw the formal launch of its WLL services. The service was particularly popular in Mumbai which saw the subscriber base shoot up to 50,000 by the end of the fiscal from a base of just 500 subscribers at the beginning of the fiscal. The installed capacity of WLL in the city stood at 55,000 subscribers at the end of the fiscal, up from 1,000 subscribers the previous year.

The Delhi market’s response—where Garuda’s launch happened after Mumbai—was relatively more conservative. It started with a subscriber base of 7,000, notching up 19,000 subscribers by the end of the fiscal.

In GSM, although the company did flounder in the beginning, it managed to catch up in Mumbai marginally. From a base of 8,000 subscribers at the beginning of the fiscal, it managed to pool in 80,000 subscribers by the end of the fiscal. In Delhi, the number of subscribers increased from 10,000 to 19,000 by the fiscal end. Both the cities have an installed capacity of 1 lakh each for their GSM services. During the next fiscal, the company expects to add 200,000 subscribers.

MTNL’s sluggish growth in GSM services is particularly ironic given the fact that the reduced tariffs in GSM, was triggered by MTNL’s high-profile launch of Dolphin, which was instrumental in expanding the cellular market. Moreover, at a time when SMS was pushing the growth of cellular services, MTNL failed to make a dent by pitching for the new offering.

MTNL TURNOVER FACTSHEET Chairman and MD : Narinder Sharma Area of Operation : Basic, cellular, Internet, WLL, IN services, leased lines No of Employees : 60,000 Address : MTNL, 12th floor, Jeevan Bharti Tower-1,  124, Connaught Circus,  New Delhi 1100 01 Tel : 011-371 9020 Fax : 011-331 4243 S W O T Strength  Strong cash flow, Large network Weakness Poor customer-care orientation Opportunity Can leverage on its existing network and customer base Threat  Private operators

Although the company launched its pre-paid card Trump during the fiscal, it failed to make an impact primarily for the lack of reach among potential subscribers. By mid-year, MTNL realized it had to spruce up its marketing act and undertook the task of rebuilding its brand. It initiated the process of appointing a single agency to coordinate its entire media campaign. It also undertook the task of increasing its reach by appointing as many franchisees as possible.

The company set up outsourced call centers in both the metros to cater to customer queries.

In basic services, MTNL continued to dominate the metros.

This fiscal, MTNL has clearly set its agenda on wireless services. The year would see investments in expanding its CDMA and GSM services to the tune of Rs 1,000 crore. As far as fixed line services are concerned, the company would invest Rs 200 crore in upgrading its network.