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Tariff cuts and ADC reduction hit MTNL profits by 38.37 per cent

Written by: Staff

New Delhi, Apr 25 (UNI) With overall telecom tariffs at a new low, Access Deficit Charges (ADC) becoming almost negligible and amidst stiff competition from the private sector, state-owned telecom company Mahanagar Telephone Nigam Ltd (MTNL) today posted a 38.37 per cent dip in their profits at Rs 578.67 crores in 2005-06 compared to Rs 938.97 crores in the previous year.

However net profit during the quarter ending December 2006, went up to Rs 140.27 crores from Rs 117.55 crores in the same quarter during the previous year.

Income from service for the year reduced from Rs 5592.4 crores during 2004-05 to Rs 5249.4 crores during 2005-06.

''Inspite of significant reduction in tariffs due to stiff competition, decrease from services is Rs 343 crores which is 6 per cent,'' Chairman and Managing Director R S P Sinha said here while announcing the companies unaudited results for 2005-06.

He said the other income during the year went up from Rs 491.7 crores to Rs 536.14 crores. The increase is mainly due to interest on refund of income tax deposited in earlier years.

Income from services during the quarter went up to Rs 1445.28 crores from Rs 1266.93 crores during the previous quarter ending 31 December 2005.

The staff expenses during the year went up to Rs 1736.59 crores, which is Rs 99.29 crores equivalent to 5.41 per cent as compared to the previous year which partly attributed to the implementation of Voluntary Retirement Scheme (VRS).

MTNL, Director Finance Anita Soni added that due to implementation of cost control campaign the administrative and other operating expenses during the current year have decrease by Rs 17.21 crores as compared to the previous year.

''The revenue sharing of Rs 1232.02 crores includes additional liability of Rs 410.12 crores payable to BSNL for the period from October 2000 to March 2005 for which provision was made in the earlier years,'' the Director Finance said.

The revenue was affected also due to reduction in revenue from Reliance for the International Long Distance Traffic. Moreover the ADC which the private players from their revenue to state owned MTNL and BSNL also has been decreased has hit MTNL by Rs 60 crores, Mr Sinha said. Due to the STD tariff revenues have decreased from Rs 440 crores to RS 240 crores.

Mr Sinha said however next year with the peaking Broad Band players and launch of triple play services the financial performance will increase many fold.


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