MTNL: Government looks to shift MTNL's operations to BSNL

NEW DELHI: Having failed to come up with a viable proposition, government is now looking to hand over the operations of ailing telecom PSU MTNL to its bigger sibling BSNL , instead of merging the two state-run firms that have repeatedly been handed out bailouts, including around two years ago.The fresh proposal will be taken up by the Committee of Secretaries (CoS) after which it will be put up for Cabinet approval, highly-placed sources told TOI.The proposal to hand over the operations of publicly-listed MTNL — that offers services in Delhi and Mumbai — to BSNL will help the latter offer pan-India operations as it works on a revival plan.“By not merging the two companies, there is no need to de-list MTNL from the bourses. In case of a merger , MTNL would have to be de-listed and a condition would have arisen to buy back certain number of shares. This can now be avoided as it will be a simple handing over of operations,” one of the sources said.MTNL’s poor performance, however, has not resulted in any adverse impact on the company’s shares. Despite incurring heavy losses and having witnessed decline in its subscriber base, the share price of MTNL has gone up 139% over the past one year on the BSE, closing the day at Rs 46.3 against Rs 19.4 on July 12 in 2014.Also, even as the broader telecom industry witnessed massive growth over the past decade, MTNL has not been able to gain from this surge and has rather lost market share and grip on business (mirroring the decline also seen by BSNL). The share of MTNL’s wireline business (including broadband) has come down to 6% at the end of the April this year against 12.5% in April 2014. On the other hand, in the mobile business, the company’s share has gone down to nearly 0.2% against just below 0.4% a decade back.The move to hand over daily operations to BSNL is likely to have an impact on the scrip of MTNL as the company will only have land and buildings as its assets.The source said that the department of telecom (DoT) wants to hasten the integration between the two companies as both have been struggling with no sight of a credible revival. For the year ended March 31, 2024, MTNL reported widening of losses to Rs 3,303 crore from Rs 2,911 crore a year ago.The annual revenue from operations declined by 15% to Rs 728 crore in the financial year 2023-24 from Rs 862 crore in FY23. The outstanding debt of MTNL at the end of FY24 increased to Rs 25,795 crore from Rs 23,500 crore a year ago. The outstanding debt on the company excludes short term borrowings and non-convertible debentures worth Rs 3,569 crore for which the liability to pay interest and principal is on govt.