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Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) have signed a memorandum of understanding (MoU) to optimize operations. While both the government-run entities, they operate differently and in different cities. It is worth noting that BSNL already took over the responsibility of handling the mobile network services of MTNL in Mumbai and Delhi. According to an exchange filing from MTNL, the signed MoU is to bring synergy to the operations of both companies.

BSNL, MTNL Sign MoU to Optimize Operations

Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) are the two government-run telecom companies in India. Both companies have different management and a completely different target market. For instance, MTNL only focuses on the Delhi and Mumbai metro circles while BSNL works PAN-India. A few years back, there were talks around the merger of both state-run telecom companies to streamline operations. But then there were no updates and the merger was seemingly put to the side by the government. However, the merger of both companies could be very much in the books.

BSNL and MTNL Merger Seems to be Back on the Books

Loss-making state-owned telecom firm MTNL Ltd on Thursday (November 14) reported a net loss of ₹890.3 crore for the second quarter that ended September 30, 2023. The company recorded a net loss of ₹ 773.5 crore in the April-June quarter. In the second quarter, total revenue stood at ₹174.2 crore during the period under review, down 5.3% against ₹183.9 crore in the corresponding period. At the operating level, EBITDA loss stood at ₹119.3 crore in the second quarter of this fiscal over a loss of ₹110.9 crore in the preceding June quarter. EBITDA is earnings before interest, tax, depreciation, and amortisation.

MTNL Q2 Results | State-owned telecom company reports net loss of ₹890 crore

The company has been reporting considerable net losses. The company’s major revenue comes from landline users, and with the reduction in the usage of landline services, ARPUs have been coming down continuously.

The issuer has made timely interest payments.

P. K. Purwar, Chairman and MD

The rating is based on the strength of the credit enhancement facility provided by the unconditional and irrevocable guarantee from the GoI through the Department of Telecommunications, Ministry of Communications.

A well-defined payment T-structure between MTNL, GoI and SBICAP Trustee Company Ltd should ensure timely servicing of interest and principal obligations on the bonds and NCDs. A designated trust and retention account has been opened for the benefit of the trustee.

With the successful completion of the VRS, the company’s employee benefit expenses have nearly halved, and that has helped the company become EBITDA positive and also in cutting down net losses substantially

Security Name: 7.78% Mahanagar Telephone Nigam Limited 10 Feb 2033

ISIN:

INE153A08121

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AAA (CE) Stable

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Mahanagar Telephone Nigam Limited

Recent News

BSNL, MTNL Sign MoU to Optimize Operations

BSNL and MTNL Merger Seems to be Back on the Books

MTNL Q2 Results | State-owned telecom company reports net loss of ₹890 crore

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