State-owned telecom service provider BSNL has enjoyed a couple of decent headlines in the past week, unlike its much smaller sister company MTNL, whose financial woes seem to be worsening.
Late last week BSNL announced the soft launch of a 4G network in the national capital through a network access arrangement. The company says it is using a 4G-as-a-service model through a partner to ensure citywide coverage immediately, while building, in parallel, its own indigenous network. Customers will get instant 4G availability across Delhi on supported handsets.
The company’s ongoing 4G rollout has reportedly included the installation of 100,000 mobile towers for 4G services and the Economic Times news service says BSNL will invest another INR470 billion (about US$5.4 billion) in boosting its network.
The same source also reports that BSNL has soft launched its eSIM services in the Tamil Nadu circle (a circle is a geographic area usually corresponding to a state). This service will be rolled out nationwide to people with eSIM-capable devices.
Of course, rival operators Reliance Jio and Bharti Airtel already have functioning 5G networks and Vodafone Idea has made major progress in its own 5G rollout. All three private operators also offer eSIM services, Nevertheless, this news does seem to offer some grounds for optimism and hope that BSNL will continue to hold on to many of its mobile users, who are estimated to number just under 90 million.
By contrast, MTNL has no good news. Reuters reports another default by MTNL on loan repayments worth about INR86.59 billion (US$990.48 million) to a group of seven public sector banks, combining both principal and overdue interest. MTNL has also failed to repay a bond payment due on August 24, though the amount involved has not been disclosed.
Reuters says the debt-laden operator has long struggled with falling subscriber numbers, mounting losses and shrinking relevance. Its service area is only Delhi and Mumbai; BSNL operates nationwide.
The news service adds that MTNL has been surviving largely on government support and debt roll-overs, but how long this can last is hard to say.
A full-scale merger with BSNL seems to have been discounted, though it is widely assumed that plans for BSNL management to take over MTNL's operations have gone ahead.
But MTNL’s total debt is still a problem. It is estimated at a staggering US$3.96 billion, including sovereign-guaranteed bonds and loans from the Department Of Telecommunications (DoT), and there doesn’t appear to be a clear plan for paying it back.
