The government is considering the option of handing over operations of Mahanagar Telephone Nigam Ltd (MTNL) to BSNL through an agreement, instead of pursuing a merger route, a source privy to the development said.
A final call on this is likely to be taken in a month's time.
The source told Press Trust of India that the option of handing over debt-laden MTNL's operations to Bharat Sanchar Nigam Ltd (BSNL) through an agreement is being looked into. The source said that given MTNL's high debt, a merger with BSNL was not a favourable option.
Once the decision is taken, the proposal would be placed before the Committee of Secretaries, and thereafter taken to the Cabinet.
Amid mounting financial woes, MTNL this week informed in a statutory filing that it is unable to make interest payment to certain bondholders "due to insufficient funds".
"The second semi annual interest with regard to 7.59 per cent MTNL's bond series...is due on July 20, 2024. As per the structured payment mechanism of Tripartite agreement (TPA) signed among MTNL, Department of Telecom and Beacon Trusteeship Ltd, MTNL has to fund the semi-annual interest into the Escrow account with adequate amount 10 days before the due date," it said.
In view of the provisions of TPA, it is informed that due to insufficient funds, MTNL could not fund the Escrow account with adequate amount, the corporation said in the BSE filing.
While MTNL offers services in Delhi and Mumbai, BSNL runs all India operations (except Delhi and Mumbai).
Even as private telcos like Reliance Jio and Bharti Airtel have scaled their subscriber tally in past months capitalising on Indian users' massive appetite for data and voice services, the customer base of MTNL has been dwindling - from just 4.66 million (wireless and wireline) in January-March 2023 to 4.1 million a year later.
MTNL's losses mounted to Rs 3,267.5 crore in FY24 from Rs 2,915.1 crore in FY23.
Revenue from operations in last fiscal year was Rs 798.56 crore, down 14.6 per cent from a year ago.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
Featured Video Of The Day
"Reforms Focus Not For Editorials, But To Make Country Strong": PM's I-Day Speech
BSNL, MTNL Merger Deferred Due To Financial Reasons: Minister BSNL Chief: Staff To Get Salary Before Diwali BSNL, MTNL Merger Plan Discussed By Telecom Department Officials: Report 150 mg Semen In Kolkata Doctor's Body, Suspect Gang-Rape: Parents To Court 2 French Rafale Jets Collide Mid-Air, Instructor, Pilot Missing "Attempt To Save Accused Instead Of...": Rahul Gandhi On Doctor Rape-Murder G20 Nations Couldn't Do, India Did, Met Paris Accord Target Before Time: PM "Targeted Violence Against Hindus...": Vivek Ramaswamy On Bangladesh Unrest Probe Reveals Brazil Plane Crashed One Minute After Pilots Sensed Trouble Track Latest News Live on NDTV.com and get news updates from India and around the world.