The central government has mandated all ministries, public departments, and public sector units to use telecom services of State-run BSNL and MTNL.
The central government has taken big bets to get the government telecom companies Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) out of the losses. The central government has made it mandatory for all ministers and their ministry, government departments, government sector units to use BSNL and MTNL.
In this case, a notification has been issued by the Department of Telecommunications (DoT), in which the Government of India has approved mandating the use of BSNL and MTNL in all ministries, government departments, CPSUs, Central Automation Organization. On 12 October, a notification in this regard has been issued to all the departments of the Center and their secretaries after talks with the Finance Ministry.
This decision would certainly benefit both the PSU telecom operator. BSNL registered a loss of Rs 15,500 crore, and MTNL registered a loss of Rs 3,694 crore in the FY 2019-20. The rising competition in the broadband industry of India has also put BSNL in a tough spot. BSNL had a broadband customer base of 2.9 crores in November 2008, and it came down to 80 lakh in July this year. As for MTNL, its fixed-line customer base of 35.4 lakh in November 2008 came down to 30.7 lakh in July this year.
Subscribers of Both Companies Decreased Rapidly
The decision to make state-owned telecom mandatory in all ministries and government offices was taken in a cabinet meeting after discussion with the finance ministry. After this decision, a notice was sent on behalf of the Department of Telecommunications to all ministers, their ministries and departments as well as other government institutions. It directed to use BSNL and MTNL telecom service.
This includes services such as the internet, broadband, landline, and leased lines. Such a step has been taken by the government to overcome the losses of the government telecom company Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL). Both these companies were fast losing their wireline subscribers in India.
Government Announced Relief Package
BSNL has incurred a loss of Rs 15,500 crore in the year 2019-20, and MTNL has incurred a loss of Rs 3,694. BSNL’s wireline subscriber base has fallen sharply, where in November 2008 BSNL had a total of 29 million wireline subscribers, whose number has come down to 8 million in July this year.
Apart from this, the number of fixed-line customers of MTNL fell to 30.7 lakhs in July this year from 35.4 lakhs in November 2008. BSNL expanded its network and operations to collect Rs 8,500 through sovereign bonds, while MTNL has been directed by the cabinet to issue Savarn bonds worth Rs 6,500.
