Mahanagar Telephone Nigam Limited (MTNL) has drawn up a 10 year plan to reposition itself as a multimedia company. This has been reported by a leading national daily.
MTNL (FY99 Revenues: Rs 52.47 bn), a public sector company, is a franchise of the Department of Telecom. The company has a 15-year telecom license to operate in New Delhi and Mumbai until the year 2013.
MTNL's move comes in the wake of competition having intensified in its core area of business - local telephony services. In its new area of business, Internet services, MTNL has also witnessed cutthroat competition in the market place. In view of this, the company has been looking at avenues to boost growth and profitability. In the light of these developments, MTNL's decision to position itself as a multimedia company may just be a step in the right direction. The new business plan has been announced ahead of its American Depository Receipts (ADR) issue next month.
The company plans to offer services pertaining to telecom software development, content providing, value-added services and e-commerce. The company also plans to set up payment gateways and also enter into tie ups with cable companies. MTNL also plans to pick up equity stakes in various software and telecom companies.
MTNL has laid out a very ambitious plan for itself. Implementing it will, however, be a mammoth task. It is nonetheless the right strategy in view of the blurring of the telecom, Internet services, software, and media businesses. The company would be able to leverage on its existing infrastructure and cash resources to convert itself into a 'multimedia' giant.
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