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September 9, 1997


Rs 20 billion to do or die!

MTNL draws up plan to pre-empt a customer migration

Faced with the prospect of a majority of the subscribers shifting their allegiance to private basic telecom operators, the public sector Mahanagar Telephone Nigam Limited has drawn up a Rs 19.79 billion modernisation plan to face the challenge.

The MTNL board is likely to finalise the strategic modernisation plan - Vision 2000 - soon to bring its telephone network in Delhi and Bombay on par with international standards.

In an exhaustive study of the sector's future profitability, Vision 2000 warned that the top segment of the department's subscribers contributing over 80 per cent of its revenue would migrate to the private sector if 'proactive steps' are not taken.

"There is a strong possibility of migration of these commercially important persons to the private service providers, thereby severely eroding MTNL's profitability," the document said.

The committee appointed by MTNL Chairman S Rajgopalan to prepare Vision 2000 has observed that the rate of growth of per line revenue is not commensurate with the rate of growth in the network.

The committee has stated categorically that MTNL continues with the legacy of antiquated procedures rules and regulations which are outdated to serve the present aspirations and needs of the demanding customers.

"The absence of independent policies and continuance of control of Department of Telecommunications is hampering the growth of MTNL," it said.

Nevertheless, the committee is of the view that the migration of 'commercially important persons' to the competitors can be prevented by building customer confidence by way of technology upgradation, qualitative and perceptible improvement of services and framing customer friendly procedures.

MTNL has urged the government that the corporation should have full financial powers to meet its requirement of operational and development activities. At present, MTNL has limited financial powers to sanction the projects. "This is a constraint in deciding our plans," the committee said.

The strategic document lists out the projects and proposals required to modernise the network so as to bring the telecom services in the two units of MTNL at par with those available in the more developed countries.

The six-member committee, convened by the General Manager, Development, A K Sinha, at its corporate office in New Delhi has laid special emphasis on customer satisfaction and improvement of human resources.

- Compiled from the Indian media

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