NEW DELHI: The board of directors of Mahanagar Telephone Nigam Limited (MTNL) has approved the telecom company's 10-year service agreement with government-owned Bharat Sanchar Nigam Limited (BSNL).
The board of directors has “granted its approval to enter into a service agreement between BSNL and MTNL for 10 years or unless revoked earlier with 6 months’ notice or extended by mutual consent of the parties, subject to approval of the said service agreement by the Department of Telecommunications (DoT)/Ministry of Corporate Affairs (MCA),” MTNL said in a regulatory filing on Wednesday after a board meeting that concluded today.
Currently, MTNL provides services in Delhi and Mumbai, while the rest of the country is served by BSNL.
Both BSNL and MTNL have been unable to compete with private telcos, mainly due to the lack of 4G and 5G services. The companies are losing subscribers every month due to the lack of latest telecom technologies.
The government previously proposed a merger of the two state telecom companies, but this had to be postponed, mainly due to MTNL's high debt burden.
The MTNL Board has also approved the sale of shares of MTNL in Mahanagar Telephone (Mauritius) Ltd (MTML), a wholly owned subsidiary of MTNL, by complying with the applicable guidelines of the Department of Investment and Public Asset Management (DIPAM) and all other processes under the Securities and Exchange Board of India (SEBI)/Companies Laws.
The Board of Directors further approved the proposal for sale of shares of MTNL in MTNL STPI IT Services Ltd (MSITS) on the basis of intimation to STPI, by complying with the provisions of the joint venture (JV) pact with STPI and by complying with applicable DIPAM guidelines and all other processes under SEBI/Companies Laws.
It is notable that the board of directors also approved the proposal for the closure of Millennium Telecom Limited (MTL), a wholly owned subsidiary of MTNL, by complying with applicable DIPAM guidelines and all other processes as per SEBI/Corporate Laws.
