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MTNL Shifts Operations To BSNL Amid Financial Struggles And Industry Competition

Mahanagar Telephone Nigam Limited (MTNL) faces operational transition to BSNL amid financial challenges and declining market share.

Edited By : Swechchha | Updated: Jul 11, 2024 00:15 IST
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MTNL now be managed by BSNL
MTNL now be managed by BSNL

MTNL, the telecom provider owned by the government, is finding it difficult to compete with private companies such as Jio, Airtel, and Vodafone-Idea. Once a major player, MTNL is currently in decline. Recharging directly with MTNL is no longer possible as the government has terminated the independent activities of MTNL. BSNL will now oversee all of MTNL’s activities, including recharges. Additionally, the Voluntary Retirement Scheme (VRS) is available to MTNL personnel.

The government intends to totally transfer MTNL’s operations to BSNL after restructuring the company’s enormous ₹30,000 crore debt. Even though MTNL isn’t officially closed down, its services will still be provided by BSNL even if its separate operations are being phased out. Additionally, the government intends to transfer the 3,000 employees of MTNL to BSNL or grant VRS to them. BSNL is taking over MTNL’s activities due to its declining financial health.

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To support both state-run companies, the government has provided a relief package of ₹3.22 lakh crores since 2019 and has offered a revival VRS plan to reduce costs. Once MTNL’s operations are merged, BSNL will manage telecom services nationwide, and the government expects better results.

While private telecom companies rapidly advance in the 4G and 5G race, offering fast internet and better-calling services, government-run companies are struggling. Both MTNL and BSNL have fallen behind in this technological race, losing customer bases as a result. Reliance Jio leads the market with a 40.48% share, followed by Bharti Airtel at 33.12%, and Vodafone-Idea at 18.77%. In comparison, BSNL holds only 7.46%, and MTNL a mere 0.16%.

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First published on: Jul 10, 2024 07:00 PM IST

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