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Will this Navratna company be shut down? Currency that used to circulate in Delhi-Mumbai

Sagar Patel

By Sagar Patel

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A Navratna company in the country is likely to shut down in the coming days.

Soon one Navratna company of the country might cease to exist. Yes, this company is none other than Mahanagar Telephone Nigam. This company came into existence about 37 years ago, in 1986. Despite being BSLN, this company had its own individual identity. Which will soon end. The special thing is that with the demise of this company, the Navratna companies of the country will also be reduced. MTNL had been given the status of a Navratna company. In fact, the company has a debt of several thousand crores. The government is busy finalizing the restructuring. After that, all the operations of this company will be transferred to Bharat Sanchar Nigam Limited i.e. BSNL.

BSNL will handle the entire operation.

Officials familiar with the matter said in media reports that while a decision to officially close the company has not been taken yet, it will no longer operate on its own. He said BSNL will take over all operations of MNTL. BSNL already manages the wireless operations, but once the loan restructuring is completed, BSNL will take over everything.

Another person told the media report that the government is also considering whether around 3,000 MTNL employees should be offered Voluntary Retirement Scheme (VRS) or transferred to BSNL. The government believes that once BSNL starts managing all operations in the country, better results will be achieved. Currently, MTNL provides services in Delhi and Mumbai, while BSNL provides services in the rest of the country.

The government’s merger plan failed

Earlier, the government had drawn up a plan for the merger of both companies, but due to the high amount of MTNL’s loan, the merger plan could not be carried out as it could aggravate the financial problem. Therefore, in 2022, the Cabinet decided to restructure the debt of both telecom companies. The plan also provided sovereign guarantee to enable the companies to obtain long-term loans and restructure them.

Participation of BSNL and MTNL

Currently, both BSNL and MTNL are unable to compete with private telecom companies due to lack of 4G and 5G services. Due to lack of new telecom technologies, the companies are losing customers every month. At the end of April this year, while BSNL’s customer market share was 7.46 per cent, MTNL’s share was a meager 0.16 per cent. In comparison, market leader Reliance Jio’s wireless subscriber share was 40.48 per cent, followed by Bharti Airtel at 33.12 per cent and Vodafone Idea at 18.77 per cent. BSNL’s loss in the fiscal year 2023-24 was Rs 5,378.78 crore. During the same period, MTNL made a net loss of Rs 3,267.5 crore.

A package of Rs 3.22 lakh crore was handed over.

The government has been working since 2019 to provide a lifeline to both telecom companies. When it became clear that MTNL would not be able to survive on its own, it was decided that BSNL would manage the operations. Since 2019, the government has provided assistance worth Rs 3.22 lakh crore to the telecom companies in the form of three bailout packages. In 2019, more than 92,000 employees of both companies took VRS as part of the relief package. Thus, the burden of high salaries on the companies was reduced. What is special is that this salary accounted for around 75 per cent of the companies’ revenue.

What is BSNL’s planning?

The government has now focused on making BSNL more efficient, so that it can compete with private players like Reliance Jio and Bharti Airtel. Many measures are being taken at BSNL such as network upgradation, improving employee cost, operational efficiency, etc. Though Delhi and Mumbai are very attractive markets, the competition is also the same. An official said in the media report that we are working on increasing sales and distribution. So that BSNL can get good business in the metros.

MTNL has not been able to do anything special over the last few years. Its share is zero, but things may change in the future. The focus will also be on fibre broadband in Mumbai and Delhi as this is an attractive segment where Reliance Jio and Bharti Airtel are the major players. An official also said that BSNL is doing well in the rest of the country with fibre-to-the-home (FTTH) connections.

Sagar Patel

Sagar Patel

I am Sagar Patel, specializing in business news reporting. With a keen focus on economic trends, market analysis, and corporate developments,

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