The Indian government has directed all public departments, ministries, and PSUs (public sector units) to use telecom services of state-run MTNL (Mahanagar Telephone Nigam Limited) and Bharat Sanchar Nigam Limited (BSNL) for leased lines, broadband and internet, a memorandum issued by the telecom department said.
“The central government has, inter-alia, approved the mandatory utilisation of capacities of BSNL and MTNL by all ministries/departments of the government of India, CPSEs, central autonomous bodies,” the memorandum dated October 12 reads.
After deliberations with the finance ministry, the memorandum was issued to all secretaries and departments under the Union government.
The Department of Expenditure’s note mentioned that the decision to make the use of BSNL and MTNL telecom service compulsory was taken by the Cabinet.
Earlier this year, the telecom department has sought views from the Department of Expenditure for the “mandatory use” of telecom services provided by two state-run companies to government departments as well as agencies.
The government’s step comes as a relief for the ailing state-owned telcos which have been losing their wireline subscriber base. In the financial year 2019-20, BSNL posted a loss of more than Rs 15,000 crore while MTNL witnessed a loss of around Rs 3,690 crore.
As per the available data, BSNL’s wireline customers fell to just 80 lakh in July this year. Similarly, MTNL’s fixed-line subscriber base has come down by about 5 lakh.
In order to manage operational expenses and expand its network, BSNL has raised over Rs 8,500 crore via sovereign guarantee bonds. While MTNL is yet to raise Rs 6,500 crore which was approved by the Union Cabinet last year, as part of its revival package.