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MTNL lines up USD28m for upgrade; no plans for merger with BSNL

21 May 2018

State-owned telco Mahanagar Telephone Nigam Limited (MTNL) is planning to invest INR1.9 billion (USD27.9 million) to upgrade its network and services, the Economic Times quotes Telecom Minister Manoj Sinha as saying. ‘Now we are attempting to make [MTNL’s] services better and after a long time MTNL is investing money in improving its network and services, both in New Delhi and Mumbai. I feel they will roll out something in the next three to four months and their services will be better,’ the official said. Mr Sinha added that the Department of Telecommunications (DoT) was ‘seriously considering’ allocating 4G spectrum to MTNL and its larger sister company Bharat Sanchar Nigam Limited (BSNL). The official acknowledged that MTNL is in a difficult financial situation, attributing the operators struggles to the allotment of 3G spectrum, saying that the operator was unable to pay interest on the loans taken for the frequencies; MTNL’s debt pile was around INR168.7 billion at end-December 2017. Mr Sinha went on to say that an asset monetisation programme was being considered for the telco, although the option would not be simple, as many of the assets are held by multiple entities, including MTNL, the DoT and the government.

In a related development, the telecom minister poured water on long-running rumours of a potential tie-up between MTNL and BSNL. A merger of the two operations – the former provides services in Mumbai and New Delhi whilst BSNL serves the rest of the country – has long been seen as one of the few ways to improve the duo’s ability to compete with their privately owned rivals, but plans for such collaboration have been drawn up and scrapped several times over the last decade. Mr Sinha was quoted as saying: ‘There is no proposal to merge BSNL and MTNL. We had appointed a consultant to revive MTNL, who has given some recommendations, we are working on it.’

India, Bharat Sanchar Nigam Limited (BSNL), Department of Telecommunications (DoT), Mahanagar Telephone Nigam Limited (MTNL)

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