Cash-strapped telecom firm MTNL is investing Rs. 190 crore to upgrade its services and may also be allocated 4G spectrum to help stay relevant in the highly competitive telecom market, telecom minister Manoj Sinha has said. The Department of Telecom (DoT) is "seriously considering" to allot 4G spectrum to state-run Mahanagar Telephone Nigam (MTNL), which serves New Delhi and Mumbai, and Bharat Sanchar Nigam (BSNL), which serves the rest of the country, he said.
"Now we are attempting to make its (MTNL) services better and after a long time MTNL is investing money in improving its network and services, both in New Delhi and Mumbai. I feel they will roll out something in the next three to four months and their services will be better," Sinha told PTI. Conceding that MTNL's financial situation is difficult, he said the state-run firm is investing Rs. 190 crores in the project that will see it install new base transceiver stations, among other initiatives. Sinha said the allotment of 3G spectrum and the loans taken for the same weakened the financial position of the company in such a way that it is unable to pay interest on the loans.
Reports pegged the listed company's debt at Rs. 16,870 crores as of December 2017. The telecom firm narrowed its losses to Rs. 639.01 crores in the quarter ended December 2017, against Rs. 819.96 crores in the same quarter of 2016. Its total income stood at Rs. 852.64 crores in the quarter, against Rs. 836.43 crore. The company is yet to report March quarter and full-year numbers. The minister said an asset monetisation programme is being thought about, wherein excess assets can be monetised.
He, however, said that the assets are owned by multiple entities - the company, the DoT and the government of India. He said the DoT is fine selling off the assets it holds and also promised to take other sale proposals involving government of India-owned assets to the Cabinet. The minister, however, declined to give an estimate of how much could the company raise through such an exercise or timelines on the same, adding that the process will be carried out as per the report of a consultant.
On the 4G spectrum allocation, Sinha said, "There's a spectrum handicap to both BSNL and MTNL. So, we are seriously considering how to provide them 4G spectrum so that they can become a viable and a major player in telecom sector." It can be noted that the Parliamentary standing committee on information technology in March had asked the government to allocate 4G spectrum to the two companies at the earliest to help them compete and survive in the market.
Both the companies have reportedly submitted proposals for launching 4G services where they operate with government support on spectrum. BSNL operates in 20 telecom circles, while MTNL has operations in the remaining two areas of Delhi and Mumbai. Sinha said BSNL has been reporting operating profit for the last three years and has gained market share despite the entry of Reliance Jio, resulting in a decline for other entrenched companies. Introduction of Internet telephony will be a big positive for BSNL, the minister said.