Advertisment

MTNL plans big overhaul, but no layoffs

author-image
CIOL Bureau
New Update

By Santosh Menon



NEW DELHI: Indian telecoms giant MTNL is planning a major overhaul of its bloated organisational structure over the next few months, but its chief said on Monday laying off staff was not on the cards.



New York Stock Exchange-listed MTNL, in which the government holds a 56 percent stake, is widely expected to be one of the top candidates for privatisation during the next fiscal year starting April.



Mahanagar Telephone Nigam Ltd , which operates fixed-line, cellular and Internet access services in Mumbai and New Delhi, has around 61,000 employees, considered too high in the highly competitive telecoms business. "It's a fact that by international standards our staff strength is on the higher side," MTNL Chairman and Managing Director Narinder Sharma told Reuters in an interview.



"We have no plans to lay off employees. The attempt will be to bring productivity levels up to international standards." The MTNL chairman denied a report in the Economic Times newspaper on Monday which said the company planned to reduce its workforce by up to 33 percent.



However, he said the company could in the coming months introduce a Voluntary Retirement Scheme, under which it would offer to pay employees to quit.



Overstaffed by international standards



With 4.3 million fixed-line connections, the company has over 14 employees per 1,000 lines, compared with internationally accepted levels of 9-10 employees, Sharma said.



MTNL has engaged rating agency and consultancy firm ICRA Ltd. to look into its organisational structure and suggest a comprehensive restructuring plan for the company.



Sharma said the agency was expected to give its report within four months. "We'd like to flatten our organisational structure. It's too hierarchical now."



The bulk of MTNL's workforce comprises clerical staff and are strongly unionised, which analysts say is a major drag on its costs and operational efficiency. "Our main plan is to keep redeploying our existing staff into new businesses and aggressively expand the existing businesses," he said. He said MTNL had launched cellular phone services in Bombay and New Delhi last year without adding any staff.



Now that the cellular business has gained critical mass with some 160,000 subscribers, MTNL was planning to give a major push to its Internet business. "We're also planning a host of other services around this Internet thrust which includes payment portals and certification centres," Sharma said, adding that the company would also foray into data warehousing centres and gateway interconnect services.



Shares of MTNL were down nearly 0.6 percent at Rs 147.50 in Monday afternoon trading on the Bombay exchange, whose benchmark 30-share index was 1.38 percent down.



(C) Reuters Ltd.

tech-news