Finshots Daily The MTNL story - Rescue, repeat, regret
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Apr 24, 2025 Explore the tumultuous history of MTNL, once a telecom giant, now facing severe financial struggles. Discover how this ongoing crisis is not just a challenge for the company but poses risks to Indian banks and the economy. Dive into the complexities of government support and the critical choices that lie ahead for this beleaguered public sector unit. Will MTNL find a way out, or are we looking at a cycle of rescue and regret?
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MTNL's Decline Explained
- MTNL struggled due to outdated technology and strong competition from private telcos like Jio and Airtel.
- Despite government support and attempted revivals, it failed to modernize and retain subscribers, becoming financially insolvent.
MTNL's Financial Limbo
- MTNL owes 33,500 crore rupees and has defaulted on bank loans, now classified as a non-performing asset.
- Banks can't easily pursue insolvency for government-owned MTNL, creating financial limbo and risks for lenders.
Taxpayer Burden Through MTNL Debt
- Government guarantees on MTNL bonds expose taxpayers to risk, transferring debt burden if MTNL can't repay.
- Bank losses from MTNL could require fresh capital, which ultimately relies on government funds and taxpayers' money.