“The entire operations of MNTL will be taken over by BSNL. Already, BSNL is managing the wireless operations but once the debt restructuring is completed, entire things will be looked after by BSNL,” one of the officials, aware of the details, said.
Another person said the government is finalising if the around 3,000 staff of MTNL should be offered a voluntary retirement scheme (VRS) or transferred to BSNL. The government believes that once BSNL starts managing the entire operations in the country, there will be better outcomes. Currently, MTNL offers services in Delhi and Mumbai while the remaining country is served by BSNL.
Originally, the government had planned to merge the two state-run entities but due to high debt levels, particularly of MTNL, the merger has not happened so far as doing so would further aggravate the financial problem.
So, in 2022, the Cabinet decided to restructure the debt of both the telecom firms. The plan was to provide sovereign guarantees to the firms allowing them to raise long-term loans and restructure their debt.
Both BSNL and MTNL have been unable to compete with private telcos, particularly due to lack of 4G and 5G services. The firms have been losing subscribers every month due to the lack of latest telecom technologies.
While BSNL has a 7.46% subscriber market share at the end of April this year, MTNL’s share was a miniscule 0.16%. In comparison, market leader Reliance Jio’s wireless subscriber share stood at 40.48% followed by Bharti Airtel with 33.12% and Vodafone Idea at 18.77%.
BSNL reported a loss of ₹5,378.78 crore for 2023-24 while MTNL’s net loss stood at ₹3,267.5 crore during the financial year.
The government has been working since 2019 to provide a lifeline to the two telcos.
