Nobody can beat us

Interview with R.S.P. Sinha, CMD, MTNL.

R.S.P. SINHA took over as Chairman and Managing Director, MTNL, on August 10, 2004. He has served as Director (Finance) on the boards of other public sector undertakings. Sinha has a BSc Engineering (Electrical) degree and a masters in Business Management (Finance).

In 1999, during his tenure as Director (Finance), Videsh Sanchar Nigam Limited, he came out with a successful global depository receipt (GDR) issue of $185 million as part of the governments disinvestment plan, including public issue within the country. It was during his tenure that VSNL became the first PSU from India to be listed on the New York Stock Exchange. In an interview to Frontline, Sinha spoke about the companys strengths and its plans for improvement. Excerpts:

With so many private players coming into the market how do you conceptualise MTNLs future?

When MTNL was given GSM licence we were the third operator. Many private players had come ahead of us and captured a significant market share in Delhi and Mumbai. They were more mature operators in the GSM field. MTNL came into the game in 2001 and 2002, whereas the others had got licences in 1995 itself. Yet MTNLs market share increased from 5 per cent to 17 per cent between 2004 and 2008. We were given the platinum award for the most satisfying service operator by Readers Digest for three consecutive years. Our customer base as on March 31, 2004, was 3,60,000. Today, it is more than 37 lakhs in Delhi and Mumbai. Im sure our market share will increase to 25 per cent in the next three years.

Could you elaborate on your plans for improvement?

GSM is like a tree. When you start your service, you cant have coverage of wide PTSS [Prison TranSwitch Services]. The tree grows along with the customer base it is always interlinked. The number of PTSS will increase with the number of customers. And coverage also improves along with that. Today we have 750 PTSS. When we started it was 175.

What exclusive services can MTNL boast of?

We were the first to launch at least three services in the country. First it was broadband, next was IPTV, and now it is 3G. And our fourth service will be convergent billing.

That in place, I can give our services across the board. So if you can take all our services, we can devise a package that can be monitored on a real-time basis.

There were reports of a marginal dip in profits.

Profit is linked to expenditure. When MTNL was created it had about 62,000 employees. Salaries have increased over a period of time because of wage increments. Although we had given three rounds of VRS [voluntary retirement scheme], the employee strength is still not less than 48,000. Revenues should have also increased proportionately.

This is not in our control because of the salary and wage bill and we have flagged this issue with the Department of Telecommunication. Today, with changing technology, we dont need that many employees. But still we have to sustain them. Hence, we feel some of the liabilities that cant be borne by us should be borne by the government as they are government employees.

What are MTNLs strengths?

Our IPTV has a customer base of more than 30,000, so this is going to strengthen my fixed line. Similarly, my broadband has 6.25 lakh customers. And every day we are giving new connections. We have increased our capacity for broadband by over 10 lakh. We assume that the demand for broadband is going to be the highest.

If you ask me, as a singular operator in Delhi and Mumbai nobody can beat us. Operators were charging about Rs.2,000 a month for broadband connections before we launched. In 2005, when we launched with Rs.399, the price started to tumble. Today, we have brought the prices down to the level of Rs.99 a month.

A latest survey report even rated MTNL services above other mobile operators for the highest satisfaction level. We brought ADSL2+, which is broadband. ADSL2+ was launched in the United States on January 11, 2005. MTNL launched it on January 14. You will find that in Europe, or in other places, many of the operators still have ADSL.

We are 100 per cent ADSL2+, which gives higher speed, better coverage and longer distance. When we launched our IPTV we launched it on mpeg 4, where the compression is better. IPTV throughout the world works on mpeg2. You can get video quality with a lesser bandwidth, whereas on mpeg2 you need more bandwidth. Ive got a waiting list of 10,000 in Delhi and Mumbai for IPTV.

What problems have the company faced and how are you going to sort them out?

We have certain constraints. But we always try to take decisions that are fully transparent and then we always ensure that it is in the interest of the company. If it is in the interest of MTNL, I always do that.

That is the reason why, at least in the past five years, we not only competed with the other operators but fought, survived and exceeded the expectations of others.