According to a parliamentary panel, the Department of Telecommunications (DoT) should consider carving out MTNL’s debt and assets worth over Rs 265 billion into a special purpose vehicle (SPV) and then merge its operations with BSNL.

The parliamentary standing committee on Communications and Information Technology said that there is still hope from BSNL which is trying to earn revenue. The committee further recommended that BSNL should be allocated spectrum for rolling out 5G services at par with private telecom operators.

According to a submission made by P K Purwar, Chairman and Managing Director, BSNL and MTNL, BSNL is expected to turn profitable by 2025-26. In addition, Purwar is of the opinion that the survival of MTNL is questionable because it has debt of over Rs 260 billion and revenues of Rs 13 billion.

The panel noted that despite the implementation of revival plan, the projected net loss of BSNL for the year 2022-23 is Rs 59.86 billion. The projected net loss of MTNL for the year 2022-23 is Rs 31.40 billion. The company, however, is reporting operational profit.

The panel was also informed that the implementation of the revival plan, voluntary retirement scheme (VRS), has been successfully implemented at BSNL and MTNL. It has led to around 50 per cent salary bill reduction at BSNL and around 90 per cent at MTNL.

Further, the DoT informed the committee that the projected net loss of BSNL is due to the absence of 4G services, decline in landline revenue, non-availability of funds for capital expenditure.

The government has allocated an amount of Rs 447.20 billion to BSNL for implementation of various revival measures during 2022-23 and an amount of Rs 232.70 billion (inclusive of GST) is allotted for the cost of 4G spectrum in financial year 2022-23.