As MTNL fails to turn profitable, govt may shift ops to BSNL, says report

This is a departure from the govt's earlier plan of merging the two entities

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The government is planning to bring down curtains on the telecom operator Mahanagar Telephone Nigam Ltd (MTNL), Mint reported. The plan is to shift MTNL's staff and operations to Bharat Sanchar Nigam Ltd (BSNL), people aware of the development were quoted as saying in the report. 

This is a departure from the earlier plan of the government to merge the two entities.

The decision has come in the wake of MTNL's continuous losses resulting in rising debt. An official in the know said that the decision had been almost finalised. The official added that MTNL would be shut down, and BSNL would take over its operations.

In addition to that, the government is also considering the delisting of MTNL from the stock exchanges. However, so far, there are no plans to list BSNL.

Notably, BSNL's financial standing has become stronger over the past few years, thanks to the Rs 1.64 trillion support from the union government in 2021. The report quoted a govt official as saying, "They've prepaid Rs 7,000 crores of bank loans, and they will begin offering 5G services by 2024."

BSNL's revenues have increased from Rs 19,052 crore in FY22 to Rs 20,700 crore in FY23. This is when losses have also widened from 6,981 crore to Rs 8,161 crore during the same period.

BSNL registered revenue growth from its fibre-to-the-home (FTTH) services, which grew 30 per cent year-on-year in FY23 compared with FY22.

MTNL, on the other hand, has been unable to recover despite help from the government. The telecom operator posted losses of Rs 2,910 crore in FY23, higher than Rs 2,602 crore in the last financial year.