DoT once again knocks on finance ministry's door to repay MTNL debt

The total outstanding dues to the PSBs of MTNL is Rs 8,415.55 crore

After the finance ministry rejected a department of telecom (DoT) proposal for a partial debt waiver on the outstanding dues of Mahanagar Telephone Nigam Limited (MTNL), the DoT has once again approached the ministry seeking funds to repay the liabilities.

 

“The DoT has sent a proposal to the finance ministry seeking additional funds. The ministry is yet to take a call. It should be doing something with MTNL’s assets. DoT should come up with a clear cut plan,” a senior government official said.

 

Queries emailed to the finance ministry and the telecom department didn't elicit any response till the time of going to press.

 

MTNL’s total outstanding dues to public sector banks (PSBs) is ₹8,415.55 crore. In February, Business Standard reported that the finance ministry had rejected MTNL’s request that PSBs should take any kind of haircut on their debt.

 

“MTNL already owns assets at prime locations in Delhi and Mumbai. However, its approach has lacked clarity and execution, which is why it has not been able to monetise them effectively. Otherwise, properties in such prime areas would hardly face a shortage of buyers,” the official added.

 

In a written reply to the Lok Sabha, Minister of State for Communications and Rural Development Pemmasani Chandra Sekhar said BSNL & MTNL are monetising only those land and building assets, which are not required for their own use in the foreseeable future. For these, it has the rights to transfer ownership. 

 

The minister said that between 2019 and January 2025, the earnings of MTNL from monetisation of non-core (land and buildings) and core (tower and fibre) assets are ₹2,134.61 crore and 258.25 crore, respectively.

 

In August 2024, Chandra Sekhar had informed Rajya Sabha that MTNL had sought ₹1,151.65 crore to meet the payment of interest on sovereign guarantee bonds (SGBs) for 2024-25.

 

According to the latest data, several PSBs have classified loans to MTNL as non-performing assets (NPAs), with outstanding dues across both principal and interest components.

 

Union Bank of India is the first to classify the MTNL loan as an NPA in August 2024 while Indian Overseas Bank is the last one classifying the loan as bad debt in February this year.

 

The seven PSBs with exposure to MTNL are Union Bank of India (₹3,664.09 crore), Indian Overseas Bank (₹2,393.81 crore), Bank of India (₹1,085.20 crore), Punjab National Bank (₹467.65 crore), State Bank of India (₹354.41 crore), UCO Bank (₹268.63 crore) and Punjab & Sind Bank (₹181.76 crore).

 

MTNL defaulted on these loans last year. It reported a net loss of ₹836 crore for the third quarter of 2024-25. This is only a slight improvement compared to the ₹839 crore loss it recorded during the same quarter of the previous year.

 

Operational revenue fell sharply by 11.6 per cent year-on-year (Y-o-Y), coming in at ₹170 crore for the quarter (Q3) from ₹192.2 crore in Q3 of FY24. This drop highlights the ongoing difficulties MTNL faces in a competitive telecom market.

 

The company’s earnings before interest, taxes, depreciation, and amortisation (Ebitda) loss in Q3 of FY25 widened to ₹128.1 crore from ₹125.7 crore in the corresponding period of the previous year.

 

The company’s EBITDA (earnings before interest, tax, depreciation, and amortisation) loss also increased, widening to Rs 128.1 crore from Rs 125.7 crore in the corresponding period in the preceding year.

 

Debt default

 

₹8,415.55 crore: Outstanding dues to PSBs of MTNL

₹1,151.65 crore: Additional loan MTNL sought to meet payment of interest on SGBs

₹2134.61 crore: Earnings  from monetisation through non-core assets between 2019 and January 2025

 Several PSBs have classified loans to MTNL as non-performing assets