BSNL and MTNL sign an agreement to streamline operations

The inked MoU is intended to add synergy to the operations of both companies, stated MTNL's exchange filing.

A memorandum of understanding (MoU) was signed by Mahanagar Telephone Nigam Limited (MTNL) and Bharat Sanchar Nigam Limited (BSNL) in order to streamline operations. Although they are both government-run organisations, their methods of operation and locations vary. It is important to note that BSNL has already taken over management of MTNL's mobile network services in Mumbai and Delhi. The inked MoU is intended to add synergy to the operations of both companies, stated MTNL's exchange filing.

The state-run telecom businesses have received back-to-back relief announcements from the government. With the aid of the assistance packages, the enterprises will be able to accelerate their progress thanks to the agreed MoU. Additionally, BSNL has been assigned 4G and 5G spectrum by the government. When it begins putting out 4G and 5G, the corporation will be able to utilise it.

The Union Cabinet in June this year, approved the third revival package for Bharat Sanchar Nigam Limited (BSNL). This complete package, which would cost a total of Rs 89,047 crore, intends to revive BSNL and establish it as a dependable telecom service provider with a particular interest and emphasis on enhancing connectivity in rural parts of India.A notable component of the agreement is the transfer of shares to BSNL in exchange for the 4G/5G spectrum.

For some time now, BSNL has been beta-testing its 4G in Punjab. With the help of in-house developed technology, the government-run telecom firm ought to be nearly prepared for a commercial 4G deployment. According to telecommunications minister, Ashwini Vaishnaw, BSNL intends to launch up to 300 4G sites every day. This will allow BSNL to complete the anticipated 1 lakh site 4G rollout within 18 months.

Last month, The Jammu and Kashmir Government’s Revenue Department had issued an order dated August 25, 2023 in order to facilitate the land transfer to BSNL (a state-owned telco) for the purpose of enabling 4G mobile service saturation in formerly underserved villages throughout the region.

A purchase order (PO) for Rs 7,492 crore was also issued to Tejas Networks Limited, a member of the Tata Group, by TCS (Tata Consultancy Services), for the provision of RAN (radio access network) equipment for the implementation of 4G and 5G at 100,000 sites. The PO was received on August 15, 2023, TCS had informed the stock exchanges. TCS will serve as a systems integrator, and Tejas Networks will entirely manufacture the hardware for BSNL’s in-house 4G/5G deployment.

Prior to this, there were discussions about MTNL and BSNL merger. However, that is an improbable scenario given that MTNL would just increase the pressure currently placed on BSNL, which is already having trouble with its finances and user growth. Therefore, rather than joining forces to form a single company, it is better for both businesses to collaborate and increase the operational synergy.

According to MTNL, "The MoU with BSNL will pave the way for synergy of operations between MTNL and BSNL in order to provide pan India telecom services as a public sector enterprise under the government of India."