Government Considers Transferring MTNL Operations to BSNL
According to media reports, the government is exploring the possibility of transferring the operations of Mahanagar Telephone Nigam Limited (MTNL) to Bharat Sanchar Nigam Limited (BSNL) through an agreement.
Sources familiar with the matter informed PTI that the government intends to integrate MTNL’s operations into BSNL rather than pursuing a full merger. The final decision is expected to be made within a month, the sources said.
The reports indicate that the high debt burden of MTNL has made a merger less favorable. Instead, the government is considering an agreement to transfer MTNL’s operations to BSNL. Once the agreement is finalized, the proposal will be presented to the Committee of Secretaries and subsequently to the Cabinet for approval.
Amidst its ongoing financial challenges, MTNL recently announced that it had defaulted on interest payments to bondholders due to a lack of funds.
MTNL provides telecommunication services in Delhi and Mumbai, while BSNL operates across India except these two cities. MTNL’s customer base has declined from 4.66 million in the first quarter of 2023 to 4.1 million in the same period a year later, including both wireless and wireline subscribers.
The operator’s losses also increased significantly, from INR 2,914.1 crore in the previous fiscal year (FY23) to INR 3,267.5 crore in the current fiscal year (FY24).
