Government Considers Handing Over MTNL Operations to BSNL

The government is exploring the transfer of MTNL's operations to BSNL through an agreement due to MTNL's high debt. A final decision will be made within a month, followed by reviews from the Committee of Secretaries and the Cabinet. MTNL has faced mounting financial troubles and declining customer base.

In a noteworthy shift, the government is weighing the possibility of transferring the operations of Mahanagar Telephone Nigam Ltd (MTNL) to Bharat Sanchar Nigam Ltd (BSNL) through a formal agreement, according to a source close to the matter. This move is being explored as an alternative to a merger, primarily because of MTNL's substantial debt.

The decision is anticipated within a month's time. Once settled, the proposal will be reviewed by the Committee of Secretaries before it is taken to the Cabinet for final approval.

MTNL has recently disclosed in a statutory filing that it is unable to meet interest payment obligations to certain bondholders due to lack of funds, further illustrating its precarious financial situation. As of the latest fiscal year, MTNL's losses escalated to Rs 3,267.5 crore from Rs 2,915.1 crore in the previous year, with revenues also experiencing a significant decline.

(With inputs from agencies.)