The Indian government has embarked on a significant financial restructuring plan for Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL), two state-run telecom companies grappling with increasing competition from private players like Jio and Airtel. With the objective of raising approximately ₹16,000 crore, the government decided to sell off various land assets owned by these telecom firms, as confirmed by officials.
Recently, the proposal to monetize these assets gained momentum, having already been cleared by the National Land Monetization Corporation (NLMC) and the Department of Public Enterprises. The final green light from the Department of Investment and Public Asset Monetisation (DIPAM) is anticipated very soon as well.
A group of ministers overseeing the revival plan led by Defense Minister Rajnath Singh deemed the proposal necessary, removing previous bottlenecks by approving waivers of fees and service charges from the Delhi Development Authority and Maharashtra Housing and Area Development Authority. The appointment of Vikas Anand, the newly appointed full-time CEO of NLMC, has been viewed positively, as it is expected to accelerate the monetization process.
BSNL and MTNL are known to own over 600 land parcels and buildings across prime cities, including locations within Mumbai, Delhi, and Chennai. The identified properties for the first phase of sale include the MTNL Central Administration Building at CR Marg, Fort, and its office building near Connaught Place, as well as BSNL's building in Santacruz and the Dinrose Telephone Exchange building situated on Anna Salai, Chennai.
Finance Minister Nirmala Sitharaman announced the launch of Asset Monetisation 2.0 during her budget speech, highlighting the government's ambition to generate ₹10 lakh crore through monetizing government assets. The funds raised are intended for reinvesting in infrastructure projects aimed to bolster the economy. The government has earmarked ₹47,000 crore for disinvestment and asset monetization for the fiscal year 2025-26.
Over the years, BSNL and MTNL have encountered financial difficulties, leading to significant concerns about their sustainability. MTNL defaulted on payments totaling ₹5,726.29 crore last November, which consisted of ₹5,492 crore borrowed from various banks and interest accrued of ₹234.28 crore. The company's overall financial debt now stands at around ₹32,097.28 crore, which is approximately 40 times more than its consolidated annual income of ₹798 crore.
From January 1, 2025, core operational assets of MTNL were merged with BSNL, allowing for more efficient management and potential cost savings. With the impending sale of prime assets, both BSNL and MTNL are expected to gain the capital necessary to update and expand their infrastructure.
BSNL has begun deploying its 4G services across the country and is making strides to extend its coverage to 5G technology. This push is part of the government's broader mission to revitalize the rural and urban communications infrastructure, ensuring every corner of India has access to reliable telecom services.
The government’s asset monetization drive, which started back in 2021, has aimed to raise substantial capital to assist BSNL and MTNL, with past targets set at generating ₹6 lakh crore by selling government assets. The current strategy has shifted, with the ₹10 lakh crore goal reflecting the government’s commitment to energizing public enterprises struggling to compete with nimble private counterparts.
Analysts and industry watchers remain optimistic about the potential outcomes of this sale, particularly the prospect of revitalizing BSNL and MTNL's competitive positioning. With timely execution of these asset sales and strategic reinvestment of proceeds, the hope is for these telecom giants to regain market share and provide competitive telecommunication services across India.
Overall, the success of this financial restructuring and asset monetization plan is eagerly awaited as BSNL and MTNL seek to modernize their operations, compete effectively, and fulfill the growing demands of their customer base.