The Central government has made it mandatory for all ministries, public departments and public sector units to utilise the state run telecom services – Bharat Sanchar Nigam (BSNL) and Mahanagar Telephone Nigam Limited (MTNL)
The Department of Telecommunications (DoT) had issued the memorandum to all departments and secretaries under the Centre after consulting it with Nirmala Sitharaman-headed Ministry of Finance. The decision was taken by the Cabinet according to the Department of Expenditure’s note attached with the memorandum for mandatory adherence.
All Ministries and departments are requested to issue necessary instructions for the mandatory utilisation of BSNL and MTNL network for internet, broadband, land and lease line requirements, the memorandum further stated.
The order is expected to provide relief to the loss making telecom firms.The BSNL and MTNL have been losing their wireline subscriber base. BSNL registered a loss of Rs15,500 crore and MTNL, on other hand, recorded a loss of Rs 3,694 crore in the last fiscal.
MTNL’s fixed line customers have declined from Rs 35.4 lakh in November 2008, to Rs 30.7 lakh in July this year. The wireless subscriber base of BSNL, this year, has come down to around Rs 80 lakh from Rs 2.9 crore in November 2008.
BSNL has borrowed over Rs 8,500 crore through sovereign guarantee bonds for expanding its network and to fund its operational expenses. On the other hand, MTNL is still to raise Rs 6,500 crore via sovereign bonds as a part of a revival package which was approved by the Cabinet last year.
Earlier in May, the Department of Telecommunications (DoT) had sought opinion from the Department of Expenditure on the mandatory use of state run telecom services by all PSEs, state controlled departments and autonomous bodies.
Meanwhile, the Cabinet had sanctioned approval to a four-way revival plan for the two failing state-owned telecom companies in October last year. It had allocated 4G airwaves, and allowed assets monetisation, a merger for better network operations and Voluntary Retirement Scheme(VRS).