What Made MTNL Lose Market Share Against Private Telecom Players?

Ever Since Reliance Jio launched its operations in the country, Airtel, Vodafone-Idea, BSNL, and MTNL are trying their best to retain users. However, state-run telecom operator MTNL is under deep financial crisis as it has total debt of Rs. 20,000 crores. The telco posted a loss of Rs. 3,693.72 crores in FY20.

Notably, the Department of Telecommunication was planning to merge both BSNL and MTNL; however, the Government deferred the plan of merging two operators. The Government has deferred this plan due to financial reasons and debt of the Mahanagar Telephone Nigam Limited.

Why Merger Is Not Good For BSNL And MTNL?

It is worth mentioning that the merger plan will not help telecom operators as both are not attracting any ARPU and cannot handle data capacity. In addition, both telecom operators are not offering 4G services, which is again a major drawback as private telecom operators are planning to start 5G trials.

Besides, the Government introduced VRS for the MTNL and BSNL for their 50 percent employees. This scheme has been introduced under the revival package, which was close to Rs. 69,000 crores.

Fall Of Mahanagar Telephone Nigam Limited

Surprisingly, MTNL pager services were quite popular in the 1990s. Besides, MTNL used to offer landline and broadband services to 60 lakh and 12 lakh customers in Delhi and Mumbai; however, now it has 27 lakh landline and 4.5 lakh broadband users.

Apart from that, the MTNL CDMA services were asked to offer in Mumbai only. These services were known as Garuda. On the other hand, private telecom operators used to offer their services in all locations without any restriction. In addition, MTNL was asked to pay Rs. 10,000 crores in 2008 for the airwaves despite the telecom operator is operating in Delhi and Mumbai.

"We never understood why MTNL was forced to pay Rs 10,000 crores when it operates only in Mumbai and Delhi circle, whereas the operator who paid Rs. 10,000 crores had an operation across the country," KamgarSangh Arvind Sawant, South Mumbai MP and president of MTNL was quoted by Mumbai Mirror.

It seems that management has also played an important role in the current situation of MTNL. For the unaware, MTNL started its operations on April 1, 1986, in India.

However, none of the state-run telecom operators is good enough to compete with the leading telecom brands, which is why we believe that the Government should support both MTNL and BSNL so that they can launch 4G services and increase their user base.