New Delhi: State-run telecom operator MTNL has informed the bourses about its loan defaults to seven state-run banks- Union Bank of India, Bank of India, Punjab National Bank, State Bank of India, UCO Bank, Punjab and Sind Bank and Indian Overseas Bank to the tune of Rs. 8,585 crore.
MTNL, which operates only in Delhi and Mumbai, has seen its existing services become obsolete, despite launching its 4G services in partnership with BSNL in August last year. This is almost a decade after 4G was introduced in India in 2012. Since then, Jio and Airtel have dominated the market, and 5G services are slowly taking over 4G customers.
BSNL had become commercially unviable for almost 10 years now, reporting a cumulative net loss of Rs.29,100 crore ever since.
The government is making an effort to revive MTNL, mostly by selling off its physical, non-core assets. In September last year, state-run NBCC India Ltd was tasked with developing MTNL’s 13.88 crore land parcel worth Rs. 1600 crore at Pankha Road, New Delhi, for commercial and residential purposes. There is no announcement yet of the other 41 land and building parcels in Delhi, including 14 vacant plots that MTNL currently owns, though they may be sold anyway.
MTNL’s parent company BSNL, which offers mobile telephony across the country, has been actively working to shed its sick PSU tag, even though it hasn’t launched its 5G services yet. Recently, the company reported its first profit in 18 years, and announced the launch of a SIM-less 5G internet broadband service for corporates in remote locations. The government has worked hard to revive many sick PSU’s and BSNL is one they have to deal with sooner or later, though no official announcement has been made in this regard yet. In the last year, MTNL has given a -5% return to investors. Many analysts think the government may liquidate the company or merge it with BSNL, though the government is yet to decide its fate.
