Govt plans to infuse Rs 39K Cr in BSNL & MTNL; Is it enough?

By July 15th, 2014 AT 12:45 PM

The Government of India has acknowledged that the BSNL and MTNL are currently in financial distress and that it wants to restore them to profitability. It has also announced that it plans to infuse Rs 39,458 crore of fresh investment over the next five years, communications minister Ravi Shankar Prasad said during the Rajya Sabha.

What’s interesting is that he also blamed the previous UPA government for the state of both telecom companies, stating that the previous UPA government did not provide required support to run the companies effectively.

According to a report by the Economics Times, BSNL’s market share of mobile connections has dipped to 10.95% by May 2014, from 14.87% in March 2009. While MTNL’s market share dipped to mere 4.87% from 10.87% during the same period.

During the financial year 2013 BSNL reported a loss of Rs 7,884, a fourth straight loss making fiscal for the company. On the other hand, MTNL reported a profit of Rs 9,600 crore for the quarter ended March 31, 2014, however, this was because the Indian government had decided to take over the liability for payment of pensionary benefit w.e.f 01.10.2000 as per the pattern of BSNL.

The new government’s plan to revive the state-owned telcos is noteworthy, however, just infusing money into a loss making company is not going to be enough. It’s worth noting that in April 2013, the previous government had set up a Group of Ministers (GoM) to recommend short, medium and long-term measures to revive BSNL and MTNL. Some of the recommendations have already been implemented.

What the new government needs to do is bring new management to handle the telcos. In July 2013, BSNL had appointed A N Rai as the interim Chairman and Managing Director, and MTNL has appointed P K Purwar as Chairman and Managing Director. However, these new appointments, albeit interim, are from within the organization. Hopefully when these telcos decide on the final appointments they are from outside the organization. These are the people who are going to bring new ideas and save the company. Just money alone won’t revive a company.

Apurva is a tech enthusiast who loves her gadgets and talks about digital media usage. She is currently developing and works for an IT company.

Leave a Reply

Photo and Image Files
20 Comment threads
7 Thread replies
Most reacted comment
Hottest comment thread
24 Comment authors
BSNL to Lease Tower Infra No to Fiber Sharing, a good Move?samirDavinderPDsujeet k Recent comment authors
newest oldest most voted

[…] and IT Ravi Shankar Prasad has asked the heads of two companies to improve their services as the Govt plans for revival. There will be a NOC (Network Operations Center) in Sanchar Bhawan to monitor both the […]


What a hell private companies. No body care u after purchasing Sim in private sector. No complaint channel only customer care number for every type of query. BSNL has a good channel for complaint booking and grievence. BSNL is in loss due to private sectors illegal works. UPA Govt has swallowed BSNL money and distributed this money to lure poor people. BSNL will be again in profit next three years and serve the nation forever

Recent Posts

MIUI 12 Starts Rolling Out to Additional Devices Including Redmi K20 Pro

Xiaomi on Thursday said that the MIUI 12 is rolling out to several devices including the Mi 9 and Redmi...

India Launches Aatmanirbhar Bharat Innovation Challenge for Promotion and Development of New Apps

The Indian Prime Minister Narendra Modi on Saturday announced the launch for Aatmanirbhar Bharat Innovation Challenge intended to promote the...

OnePlus TV Q and U Series Receive OTA Update With New Kids Mode

OnePlus has successfully launched another two new Smart TV series — U and Y. Smart TVs from both the series...