PEST ANALYSIS

MAHANAGAR TELEPHONE NIGAM LIMITED

MTNL was set up on 1st April, 1986 by the Government of India to upgrade the quality of telecom services, expand the telecom network, introduce new services and to raise revenue for telecom development needs of Indias key metros Delhi, the political capital and Mumbai, the business capital of India. In the past 17 years, the company has taken rapid strides to emerge as Indias leading and one of Asias largest telecom operating companies. Besides having a strong financial base, MTNL has achieved a market share of approximately 13% of the Indian telecommunication network with a customer base of over 4.98 million lines. The company has also been in the forefront of technology induction by converting 100% of its telephone exchange network into the state-of-the-art digital mode. The Govt. of India currently holds 56.25% stake in the company. In the year 2003-04, the company would not only consolidate the gains but would also focus on new areas of enterprise viz. Joint Ventures for projects outside India, entering into national long distance operation, widening the cellular and CDMA-based WLL customer base,setting up internet and allied services on all India basis.

VISION 2005 FOR MTNL

1.Internet Services

1. Internet for all

2. Global Roaming
3. Virtual Private network

4. Premium Internet Service

5. E-commerce enabling services, by setting up of Payment Gateway &

Certification Gateway 6. Unified Messaging

2.Broadband Internet Access services

1. ADSL

2. Cable TV, through strategic alliance

3.Mobile Internet services 1. Internet Services via Mobile phone with up to 9.6 Kbps bandwidth 2. E-commerce 3. Global Roaming 4. High speed Mobile Internet services

4.IP based Voice services.

5.IP Services in PSTN Call waiting Internet Busy 6.International Gateway Leasing Services

7.Internet Exchange Connectivity Services

8.Expansion of Managed leased line data Services

9.ATM Services 1. LAN Emulation 2. ATM Bearer Service 3. High speed video conferencing 4. Distance Learning & Telemedicine 5. Bandwidth on demand 6. Video on Demand

10.Customer Care Services

1. New Telephone registration, Bill payment and complaint registration

through Internet 2. Smart Card for Payphone 3. Mediation Billing Customer care in GSM Mobile 4. Data Ware Housing 5. Voice Mail Service 6. Call Center

11.Wireless ATM Service

12.Expand operations Beyond Delhi & Mumbai through strategic linkages with Basic, Cellular and Internet companies either by tie-ups, taking major equity stake or by acquisition. Tie up arrangement with ISP's for content as well as for cobranded portals. Setting up of venture capital fund and R & D fund to finance & encourage research institutions and IIT's for developing innovative technologies.

ECONOMIC FACTOR
The areas served by MTNL are the two most advanced metros in the country where a majority of business houses have either their headquarters of activities or at least branch offices. MTNL with a market share of about 13% of the National telecom Network, has a customer base of about 4.98 million lines at the end of 2002-03. With the increased economic activity due to liberalization, growth of lines is expected to be around 400,000 a year. The opening up of the value added services is an area which will considerably add to the prospects of MTNL due to greater utilization of the existing network, for cost to the Company to provide connectivity for these services will be very nominal. The fact that MTNL possesses a vast network of operations and is a blue chip cpmpany , has made the company's shares a favourite with investors.

MTNL MARKET SHARE IN TELECOM INDUSTRY

MTNL - A Blue-chip Some of the factors that contribute towards making MTNL a blue-chip company are :
1. Company providing vital infrastructure. 2. Sustained growth.

3. Increasing demand in a fast developing economy.

4. Tremendous resources and asset base.

5. Very high potential for value 6. Exciting developments in new services everyday

MTNL

For the Investors Govt. of India has disinvested approximately 275.63 million shares (including 70 million shares through GDR) upto 31.3.2002. MTNLs outstanding shares as an 31.3.2002 were 630 million (including 30 million through GDR IPO) out of which Govt. of India owned 354.37 million shares (56.25%). MTNLs share is being quoted at about 15 times its face value. The company also listed at the New York Stock Exchange (NYSE) on 7.11.2001.The following factors make it a success with the investors: 1. Share of a blue chip company 2. Assured dividend - High appreciation in stock value
3. High net asset value (NAV)

4. High growth in profitability

5. Sustained increase in net worth

The company is now a Public Company in the United states and is subject to very stringent requirements .MTNL is the 2nd Telecom Public Sector Undertaking from India to be listed on the NYSE .The trading symbol of MTNL on the NYSE is MTE. MTNL has a strong financial base and has shown consistent improvement in perform- ance over the years. It has market share of about 13 % of the National Telecom Network. MTNL posseses an impressive financial profile comprising of Paid Up Capital of Rs.630 crores. Reserves and Surplus amounting to Rs.8309.64 crores and Fixed Assets worth Rs.5311.80 crores(as on 31.12.2003)

Financial Operations The following operations have reinforced and strengthened MTNL's resource base: Disinvestment/GDR/ADR Telephone Bonds Capital Expenditure

Disinvestment / Global Depository Receipts MTNL is amongst the foremost public sector undertakings in India in terms of divestiture / GDR of the equity by Govt. of India. Govt. of India has disinvested approximately 275.63 million shares (including 70 million shares through GDR) upto 31.3.2001. MTNLs outstanding shares as on 31.3.2001 were 630 million (including 30 million shares GDR) out of which Govt. of India owned 354.37 million shares (56.25% approximately). The

MTNLs share has been listed at the Stock Exchanges of Mumbai, Delhi, Chennai , Calcutta & National Stock Exchange. MTNL was listed at the New York Stock Exchange on 6.11.2001, one more connection that brings more transparency in its operation . The companys equities are considered as an excellent buy globally by Foreign Institutional Investors, All-India Financial Institutions, Research Analysts, Merchant Bankers etc.

Capital Expenditure The capital expenditure during 2002-03 was Rs 10.33 billion as against Rs.8.22 billion in 2001-02 and the capital expenditure for both the years was fully met by internal resources. Assets have risen from Rs.9.79 billion in the year 1986-87 to Rs. 53.11 billion approximately

SOCIO-CULTURAL
OBJECTIVE OF MTNL 1. To sustain the existing customer base and services. 2. To provide latest technology and services to the customers. 3. To achieve the highest level of customer satisfaction and delight 4. To fund R&D projects which will help MTNL in introducing technology, understanding customer needs, trying out and indigenizing new technologies. 5. To diversify in other areas for providing telecom services at national and international levels.

6. To provide convergence of Telecom, Information Technology and related services. 7. To improve productivity by training and redeployment of man-power. 8. To work for social benefits.

MILLENNIUM TELECOM LIMITED FOR COUSTMER CARE

Incorporated on 17th Feb., 2000, Millennium Telecom Limited is a wholly owned subsidiary of MTNL that has been formed to do practically any type of Telecom Business with a focus on value added services. It intends to be a Universal Telecom solution provider to meet the needs of the customers, both Telecom and its Applications, on a one stop basis through Service Level Agreements using Multi Service, Flexible, customized access supported by a strong billing system. It intends to roll out a router-based packetised telecom network and create facilities like Application Development Centre, Internet Data Centre, STP facilities and payment gateway. Presently, it has a category A ISP licence and is in the process of application development and rolling out the services.

TECHNOLOGICAL FACTORS

INFORMATION TECHONOLOGY IN MTNL

IT support is essential to implement effective business strategies. A business has to coordinate on entire supply chain process and corresponding information flow. MTNL being a service organisation is reaching out to its customers with a customer-focused strategy for better information about customer profiles. The whole world is witnessing convergence of technologies evolved by Information Technology. Voice & Data services are being offered on single platform. Services like call centres, internet, e-commerce, intelligent network, personalized services, network management etc. are required as single window solution.

MTNL has recognised that IT is the key to future business success. IT has been implemented as the backbone for running customer friendly services. Several IT systems such as CSMS (Customer Services Management System), FRS (Fault Repair Service), DQ (Directory Enquiry), FMS (Financial Management System), IVRS (Interactive Voice Response System) and accounting and billing systems are already operational at MTNL. MTNL is also in the process of setting up Certification Authority in the current year. The projects for Data warehousing, call centers, m-commerce, e-commerce, billing mediation, telecom software development, new IT policy and consultancy projects are in the pipeline.