The central government is considering the closure of Mahanagar Telephone Nigam Ltd (MTNL) post the general elections. While the specifics of the shutdown are yet to be finalized, the Department of Telecommunications (DoT) shows no inclination to sustain the telecom company, which operates in Delhi and Mumbai.
MTNL, a publicly listed company, has been grappling with losses for an extended period. It recorded a net loss of Rs839 crore in the third quarter of the previous fiscal year. In 2022-23, its losses amounted to Rs2,910 crore, compared to Rs2,602 crore in 2021-22. Notably, Air India faced similar financial challenges before its sale to the Tatas in January 2022, with accumulated losses reaching around Rs70,000 crore. However, unlike Air India, the government appears disinclined to privatize MTNL, according to official sources.
The DoT leans towards the belief that the telecom giant should cease operations, with its workforce and activities transitioning to Bharat Sanchar Nigam Ltd (BSNL), another state-run telecom service provider covering the rest of the country. Last year, the government had contemplated shutting down MTNL due to persistent losses, but the decision remained unimplemented. Delisting MTNL was also on the government’s agenda.
In 2019, the government approved the initial revival package worth Rs69,000 crore for BSNL and MTNL to stabilize their operations. In 2022, a second revival package of Rs1.64 lakh crore was sanctioned for both telecom companies. Despite these efforts, the packages have failed to revitalize either of the state-run entities.
