Mahanagar Telephone Nigam Limited (NYSE: MTE) Slips To Red

Mahanagar Telephone Nigam Limited (NYSE: MTE) had a costly third fiscal quarter on top of decreased service revenues which forced them to turn in not too shiny financial report. The New Delhi based basic and cellular service provider said sales were down 6% to INR9.02 billion ($190 milllion) and operating costs jumped 51% to IRN 19.49 billion ($420 million) making a deadly combo.[BANNER]

Net loss of IRN8.9 billion ($190 million) was surprisingly high, considering the state run company had seen IRN531 million ($11.5 million) profit on a year ago quarter. Revenue decrease was attributable to change of tariffs while the increase in costs was nurtured by staff expenses, more accurately provision of retirement benefits.

Further in the news, the company has decided to take a slower approach to cell number portability service they were to introduce and postponed orders for portability gateway equipment. The services would allow customers to change their operator while sticking to the existing phone number.

The service is now scheduled to launch in April, however with the disappointing financial data in place the fear of losing customers might prevail. Mahanagar was cautious about this before as number portability option would pose a significant threat of losing customers. Most private telecommunication companies though have this option already in place.

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