MTNL to get CMD very soon: Sibal

CMD position with MTNL, public telecom service provider in Delhi and Mumbai circles, has been vacant since January last year

PTI | July 29, 2011



Loss making PSU MTNL will soon have a regular Chairman and Managing Director, as Telecom Minister Kapil Sibal has asked the Cabinet Secretary to expedite the appointment.

"I agree that it is very important for a company like MTNL to have permanent CMD and for that I have asked the cabinet secretary to immediately approve and send the file back with the person we have recommended. It should happen any time," Kapil Sibal told an interaction with PTI.

The position of MTNL CMD has been vacant since January last year. The company provides telecom services in Delhi and Mumbai circles. The Telecom Minister is taking a keen interest in turning around loss making PSUs like BSNL and MTNL and has recently decided to have a monthly review of their operations and performance.

MTNL's last full-time CMD, RSP Sinha, resigned on January 12, 2010, after which Technical Director Kuldip Singh has held the post as additional charge.

Though the government has appointed acting CMDs for the public sector unit, the head has been unable to take any major decisions regarding the functioning of this firm. The Government recently appointed R K Upadhyay as the permanent CMD of its peer BSNL, which operates telecom services nation-wide barring the two metros.

Increasing competition from private players and rising wage costs have impacted MTNL in a major way and it has been losing revenues and market share on a constant basis.

MTNL had raised short-term debt of over Rs 7,000 crore for acquiring 3G and broadband spectrum last year. The company had been facing cash crunch and hence decided to restructure the loan.

Recently, MTNL had invited expression of interest (EoI) from banks for providing long-term loans of Rs 1,500 crore to repay its debts and meet operational expenses. All these decisions need to be taken and implemented fast to ensure undisrupted functioning of the PSU.

Delhi and Mumbai were the most expensive circles for 3G spectrum (radio waves), with the bid for Delhi costing Rs 3,316.93 crore and for Mumbai, Rs 3,247.07 crore, as against the reserve price of Rs 320 crore each for both the metros.

Similarly, for BWA, Delhi and Mumbai saw the highest bids at Rs. 2,241.02 crore and 2,292.95 crore, respectively. MTNL has already launched 3G mobile services.

For FY'11, the telecom major had reported a net loss of Rs. 2,826 crore, 8.27 per cent more than Rs 2,610.9 crore in the same period previous year. Its total income rose to Rs 3,841.2 crore, as against Rs 3,781 during the period.

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