Bleeding MTNL turns landlord to reduce losses
The state-controlled Mahanagar Telephone Nigam Ltd is leasing out space at its well-located buildings in Delhi and Mumbai by vacating prime space in a plan to earn Rs. 50 crore a year from rentals as it moves to cut losses that totalled Rs 2,514 crore in the fiscal year ended March. Manoj Gairola reports.india Updated: Aug 03, 2010 01:41 IST
Hit by red ink, MTNL is turning landlord to boost its revenues.
The state-controlled Mahanagar Telephone Nigam Ltd (MTNL) is leasing out space at its well-located buildings in Delhi and Mumbai by vacating prime space in a plan to earn Rs. 50 crore a year from rentals as it moves to cut losses that totalled Rs 2,514 crore in the fiscal year ended March.
The company that once held a monopoly on telephone services in the country's hottest metros — and now facing competition from a slew of private players — is also contemplating leasing out its optical fibre cable (OFC) network to other telecom operators.
The income from rent will contribute directly to the bottomline, as there is no additional expense incurred by the company.
"We have set a target of raising Rs 40-50 crore," said Kuldip Singh, chairman and managing director of MTNL.
The company had revenues of Rs 5,403 crore in 2009-10 and its loss was nearly half that amount as paid huge amounts in salaries including arrears paid to the employees for last three years, besides incurring an additional burden on pension payments.
The company has 100,000 square feet of office area in CGO complex, Lodhi Road in New Delhi. "We have identified and vacated 20,000 sq feet of this area and are giving it on rent," said Singh. The company is in final stages of negotiations with Software Technology Park of India (STPI), a government agency that leases out space to IT companies.
MTNL is also vacating one floor in its office in Cuffe Parade in South Mumbai's prime real estate area. It expects to earn Rs 4 crore a year by renting this property.
In Narela, Delhi, the company owns 100,000 sq feet of office space. It is developing it jointly with STPI to house data centres that weill be on rent.
The company has also identified 10,000 sq feet area in its office at Bhikaji Cama Place to rent out. It has already given a floor at its Minto Road building close to Connaught Place in New Delhi on rent.
"Our target is such that in almost all the good buildings, we will give space on rent," said Singh.
The company has a network of optical fibre cables (OFC) laid in Delhi and Mumbai. It is very difficult for the private telecom operators to lay OFC in the two metors.
"We plan to give OFC on lease to the private telcos," said Singh.