Cabinet Secretary T.V. Somanathan is set to convene a crucial meeting next week with key stakeholders to chart the future course for the financially stressed state-run telecom firm Mahanagar Telephone Nigam Ltd (MTNL). The discussion will primarily focus on the company’s mounting loan defaults and a roadmap for financial recovery.
MTNL has defaulted on loan repayments totalling ₹8,346 crore as of April 30. This includes ₹7,794 crore in outstanding principal and ₹552 crore in overdue interest and penalty charges, owed to several state-owned banks such as Union Bank of India, Indian Overseas Bank, Bank of India, Punjab National Bank, and State Bank of India.
The meeting is expected to bring together top officials from the finance and telecom ministries, including the Telecom Secretary and Expenditure Secretary, as well as bank executives with exposure to MTNL’s loans. Discussions will include both short-term measures to manage the immediate default situation and long-term strategies such as asset monetisation, merging operations, and optimising the business model to reduce losses.
Banks had earlier raised concerns during a May 9 meeting with the finance ministry, urging swift action on MTNL’s growing debt burden. In addition to bank loans, MTNL has sovereign guarantee bonds worth ₹24,071 crore and ₹1,151 crore in dues to the Department of Telecommunications, bringing its total financial liabilities to ₹33,568 crore as of March 31, 2025. While these bonds are due for repayment by 2034, the government has no immediate plans to shut down MTNL. However, it remains cautious about injecting significant funds into reviving the PSU and is instead focusing on sustainable turnaround solutions.
