4 min readMumbaiJul 16, 2025 12:02 AM IST
First published on: Jul 16, 2025 at 12:01 AM IST
Public sector telecom company Mahanagar Telephone Nigam Ltd (MTNL) has defaulted on loan repayments worth Rs 8,585 crore to seven public sector banks, namely, the Union Bank of India, Bank of India, Punjab National Bank, State Bank of India, UCO Bank, Punjab and Sind Bank, and Indian Overseas Bank. The default amount includes Rs 790.59 crore in overdue interest and Rs 1,868.61 crore in unpaid principal, according to a stock exchange filing.
MTNL’s total financial liabilities, including both short-term and long-term borrowings, currently stand at Rs 34,484 crore, the company said.
The telco’s loan default and losses have added to the government’s financial burden, especially at a time when Vodafone Idea, in which the government holds a 49 per cent stake, reported a massive loss of Rs 27,442 crore for FY25. The mounting losses at both telecom companies underscore the challenges the government faces in reviving struggling public-sector and semi-public-sector enterprises in the highly competitive telecom sector.
MTNL’s financial health remains poor. For the financial year ended March 2024, it reported a net loss of Rs 3,302 crore and an operating income of just Rs 728.47 crore. The company acknowledged in its FY24 annual report that it has accumulated heavy losses, its net worth has been fully or substantially eroded, and it has faced net and cash losses in both the current and previous financial years. Additionally, the company’s current liabilities exceed its current assets, according to the report.
MTNL’s shares fell 4.22 per cent to Rs 49.92 on the BSE on Tuesday. The total market value of its shares stood at Rs 3,145 crore and the government holds 56.25 per cent stake in the company.
MTNL-BSNL merger plans
The earlier plan to merge MTNL with Bharat Sanchar Nigam Ltd (BSNL) now appears unlikely. Instead, the government has approved a 10-year service agreement under which BSNL will manage MTNL’s operations, especially in Delhi and Mumbai. This arrangement is designed to address the complexities of a full merger, including MTNL’s high debt burden. The agreement can be renewed or terminated with mutual consent or by giving six months’ notice. BSNL has already taken over the operation and maintenance of MTNL’s mobile services, effective from April 1, 2021 in Delhi and from September 1, 2021 in Mumbai. The government has also extended the additional charge of Chairman and Managing Director of MTNL to A. Robert J. Ravi, who is also the CMD of BSNL, for another three months, until October 14, 2025.
In an effort to improve its financial position, MTNL has taken steps to better utilise its physical assets. It has signed a Memorandum of Understanding (MoU) with BSNL to share network and infrastructure to enhance service quality. The company is also renting out its buildings in Delhi and Mumbai to generate additional revenue, with potential plans to use these assets for advertising and brand-building, the Annual Report says.
MTNL asset monetisation plans
MTNL has been mandated to monetise surplus land and building assets to reduce debt and fund capital expenditure, in line with a Cabinet-approved revival plan. To this end, the National Land Monetization Corporation (NLMC), established under the Department of Public Enterprises (DPE), has taken over responsibility for monetising assets of central public sector enterprises (CPSEs), following a government decision to transfer this function from the Department of Investment and Public Asset Management (DIPAM) to the DPE.
MTNL has restarted its monetisation programme under NLMC, submitting four properties valued at over Rs 100 crore each, which are now in the process of being monetised. Simultaneously, the company is working to monetise smaller properties — valued below Rs 100 crore — through approvals from its board of directors and the Group of Ministers overseeing the revival of MTNL and BSNL. Transaction advisors have been appointed for the monetisation of seven properties, each valued under Rs 10 crore.
The telco’s loan default and losses have added to the government’s financial burden, especially at a time when Vodafone Idea, in which the government holds a 49 per cent stake, reported a massive loss of Rs 27,442 crore for FY25. 
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