The government is studying to transfer all the assets and staff of MTNL to state carrier BSNL
The Indian government is studying the possibility of shutting down state-run telco Mahanagar Telephone Nigam (MTNL) and transfer its assets and staff to Bharat Sanchar Nigam (BSNL), local news site Livemint reported.
If it goes ahead with that action, the Indian government seems to discard a previous plan to merge the two state-run telecom companies, according to the report. The move comes as MTNL struggles with a deteriorating financial scenario including increasing debts and persistent losses.
“It’s almost decided. MTNL would be shut down; the operations will be taken over by BSNL. BSNL is already executing operations in Delhi and Mumbai,” an official with knowledge of the matter was quoted as saying. Government officials believe that merging MTNL with BSNL could potentially affect the financial condition of the latter.
The government is also evaluating delisting MTNL from the stock exchanges but has no plans to list BSNL, which is India’s fourth largest operator, another source said.
MTNL provides services in the cities of Mumbai and New Delhi. The telco had a monopoly in these two cities until 1992, when the telecom sector was opened to other service providers.
The government of India has earmarked a total of INR890 billion ($10.8 billion) for the allotment of spectrum for state-run operator Bharat Sanchar Nigam Limited (BSNL) to launch nationwide 4G and 5G services, according to recent press reports.
Through this move, the state-owned telco will obtain spectrum in the 700 MHz, 2.5 GHz, 3.3 GHz and 26 GHz bands.
A government statement said that with this spectrum allotment, BSNL will be able to provide pan-India 4G and 5G service, provide 4G coverage in rural regions under various connectivity projects, provide fixed wireless access (FWA) service and offer services or spectrum for private networks.
Last month, BSNL had ordered $1.83 billion worth of infrastructure equipment and software from compatriot IT company Tata Consultancy Services (TCS).
The provision of this telecom gear will pave the way for BSNL to be in a position to fully launch its 4G network across India. Also in May, a group of ministers approved the proof-of-concept by the TCS consortium for BSNL using an indigenous technology stack, and gave the company the approval to issue the purchase order.
According to recent reports, BSNL aims to initially provide 4G services in high-revenue telecom circles in India. Currently, Kerala, Maharashtra, Tamil Nadu, Karnataka and Punjab are among the high-revenue-earning circles for the state-owned carrier.
BSNL expects to cover all telecom circles in India with its 4G services by the end of its upcoming financial year, which ends in March 2024.
In January, the country’s Minister of Railways, Communications and Electronics and Information Technology Ashwini Vaishnaw, had said that BSNL could launch 5G technology in March 2024. Vaishnaw also clarified that initially, BSNL’s 5G network will be based on the NonStandalone (NSA) architecture.
