The great disconnect

WHEN it rained in Delhi this year, it poured trouble on the Mahanagar Telephone Nigam Ltd MTNL. Their disastrous showing in one of the cap...

WHEN it rained in Delhi this year, it poured trouble on the Mahanagar Telephone Nigam Ltd MTNL. Their disastrous showing in one of the capital8217;s posh colonies8212;Defence Colony8212;was a cause for much glee for its competitors. And to its critics it reiterated what they had been saying all along: it8217;s not competition but MTNL8217;s own ways of functioning that will be its undoing. And MTNL8217;s mess spills over to Mumbai too.

By its own admission what happened to phones in Delhi8217;s Defence Colony this July was a fiasco. What began with the plan of shifting about 5,000 telephone lines from one exchange to another resulted in one of the biggest public relations disaster in recent times for MTNL. In the process of shifting, most of the phones went dead and remained so for the greater part of the month and residents gave voice to their anger. Figures support the growing disenchantment of people with MTNL.

The rate of disconnections of MTNL phones has almost doubled in the past year. While about 5,000 MTNL users were disconnecting their phones about a year ago the number has increased to almost double that.

The number of new connections that were an average of about 15,000 per month has plummeted to an average of about 3,500 new connections per month.

Though these disconnections haven8217;t started telling on the profit figures of MTNL yet 8212;Rs 2,600 crores comes from Delhi8212;the effect is likely to be felt soon. At present, the service has about 21.5 lakh customers in Delhi and even though the private companies will take a long time to get anywhere close to that figure they are fast gaining ground.

In Mumbai it8217;s a similar story. The recent rise in MTNL8217;s landline tariffs has meant a fall in demand. 8216;8216;A couple of years ago every year would see about 3-4 lakh new connections. Now it8217;s down to 1-1.5 lakh connections. But then about 40,000 connections are also surrendered each year. So the net new connections effected per year now is about 60,000,8217;8217; says a MTNL official.

And MTNL8217;s rivals are gloating. Admits MTNL executive director in Delhi Jagmohan Mishra: 8216;8216;Our competitors did get a chance to make an entry in this area.8217;8217; Touchtel, Reliance and Tata8212;the three private players with plans to roll out landline phones had been in wait for a chance.

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MTNL8217;s huge task force has also come in the way of its smooth functioning. It has 25,000 employees in Delhi and 29,000 in Mumbai. VRS schemes are being planned but as an insider says: 8216;8216;It is only the good people who take VRS while the deadwood carries on.8217;8217;

In Mumbai its Dolphin and Garuda cellular services lured many customers but poor connectivity is playing spoiler. It even provoked MTNL8217;s union in Mumbai to hold a demonstration this June. 8216;8216;The workers fear losing their jobs if things go at this pace,8217;8217; says Arvind Sawant, general secretary of MTNL Kamgar Sangh.

It is perhaps to brace itself for these challenges that MTNL8217;s board recently decided to hire about 200 fresh MBAs and engineers. The consumers are waiting to see the difference.