India commits $6.6b for BSNL, MTNL turnaround

Dylan Bushell-Embling
telecomasia.net

The Indian government will invest a hefty 394.5 billion rupees ($6.58 billion) towards helping struggling state-owned operators BNSL and MTNL return to profitability.

The investment, which will be made over the next five years, is aimed at helping the companies tackle their substantial debt burdens, fund network expansions and address the sharp decline in their respective subscriber figures.

The Economic Times quotes telecom minister Ravi Shankar Prasad as stating that the government is serious about improving the health of the two companies.

BSNL had total debt of around 64.5 billion rupees as of the end of June, while MTNL's debt was around 147.6 billion rupees, according to the report. Both operators have also been haemorrhaging market share since 2009.

BSNL has meanwhile reported losses for the past five years, including a 70.85 billion rupee loss in the most recent financial year.

Successive governments have been trying for some time to improve the health of the two companies. The newly-elected Union government recently revived a proposal to merge BSNL with MTNL. The proposal also involves spinning off BSNL's tower assets into a separate company.

Previous proposals to merge the two companies also suggested adding state-owned telecom equipment maker ITI into the fold.

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