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MTNL launches big restructuring plan

The restructuring will take place in three phases and cover material management, financial accounting and organisational set-up.

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Global consultant McKinsey has been appointed to advise MTNL on the restructuring and is expected to present its report within two weeks, top level MTNL sources said.

The MTNL brass is keen on adopting the model followed by British Telecom during its privatisation and restructuring process.

"This would be the classic parallel for us...We need to move on to become a quick-action company," an MTNL director said. He, however, ruled out huge retrenchments as carried out by BT.

Material management restructuring will involve keeping a closer watch on purchases and supplies. S Rajagopalan, MTNL Chairman and Managing Director has said: "Vested with the power to make our own purchases, we hope to move out of the DoT system so that we can watch the impact on the bottom line. We will make our information technology system more effective so that information is available on one’s fingertips. While purchases have been made on a yearly basis, we need to look at material management with a time-frame of about four years."

MTNL is expected to soon alter the dual accounting system it has been following. It wants to move out of the government accounting system to one based on direct accruals.

"Tata Consultancy Services will be advising us on this issue and we hope to streamline this in the coming months," a senior director said.

Organisational restructuring would be taken up in the third phase, but only after the first two phases have been completed and the ongoing labour problems sorted out.

MTNL has been unable to solve the issue of addressing customer grievances satisfactorily despite its best efforts.

Rajagopalan said there are 14-15 layers between the brass and the customer in the Bombay and New Delhi offices. "We need to become a flat structured organisation. This will have to be done in phases without creating unrest or ill will at specific levels," he said.

- Compiled from the Indian media

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