BSNL and MTNL: Reviving India's Public Sector Telecom Giants with Indigenous 4G-5G Technology
The Indian government is making a concerted effort to revive BSNL and MTNL by leveraging indigenous 4G-5G technology and strategic asset monetization. Here's a detailed look at the challenges and potential solutions.
BsnlMtnl4g5g TechnologyRural ConnectivityTelecom RevivalReal Estate MumbaiMay 26, 2025
The Department of Telecommunications (DoT) has once again approached the finance ministry to waive part of MTNL’s Rs 8,416 crore debt. However, the finance ministry has been hesitant, arguing that MTNL owns prime real estate in Delhi and Mumbai but lacks a credible plan to monetize these assets. The ministry insists on a clear asset-sale roadmap before any debt relief is considered.
Impatience with the public sector units (PSUs) is understandable, given the history of failed rescue packages. The idea of merging MTNL into BSNL has been discussed, but the government has opted to transfer operations instead of a full merger to avoid the complexity of delisting MTNL. Despite these efforts, both BSNL and MTNL remain loss-making carriers, stuck in a vicious cycle of under-investment and shrinking market share.
A decade ago, BSNL’s footprint stretched from Ladakh to Lakshadweep. Today, the company trails far behind its private sector rivals. While Airtel and Jio have rapidly rolled out 5G, BSNL has yet to complete the 4G roll-out at 1 lakh sites. The marketing budgets of private players have also significantly eroded BSNL’s subscriber base.
The financial health of BSNL and MTNL has deteriorated over the years. MTNL’s EBITDA loss widened to Rs 128 crore in Q3 FY25, despite generating only Rs 2,393 crore from the sale of surplus real estate, towers, and fiber over the past five years. BSNL managed a modest profit last year, driven by double-digit growth in mobility, fiber-to-the-home, and leased-line revenue, as well as government-funded capital infusion and lower finance costs. However, this uptick is far from a full turnaround.
The government’s persistence in reviving these PSUs is driven by several factors. Rural connectivity is a critical reason, as BSNL remains the only operator willing and able to maintain remote India’s connectivity, supporting e-government services and emergency communications. Strategic value is another factor, as the two PSUs provide a fallback network in case private systems fail.
The latest revival plan hinges on India’s home-grown telecom stack. BSNL is deploying this technology for 4G and 5G at more than 80,000 sites. The government hopes that this indigenous technology can mature into an exportable alternative to Western and Chinese gear, providing BSNL with a cost advantage at home. BSNL has set an ambitious target of reclaiming 25% of the mobile market next year.
However, achieving this goal will require drastic measures. High wage bills, inefficient processes, and slow decision-making continue to hinder both firms. Analysts warn that without radical changes—such as aggressive cost-cutting, swift nationwide 4G/5G roll-out, and competitive tariffs—talk of a renaissance remains wishful thinking. Some suggest transforming BSNL into an R&D-led operator focused on next-generation networks and enterprise services, while others propose carving out assets and inviting private talent on performance-linked contracts.
MTNL’s future is even more uncertain. With operations already under BSNL’s control and limited assets to leverage, its best hope lies in niche segments. These include high-density enterprise corridors in Delhi and Mumbai, or public-sector connectivity projects where private players are hesitant to participate.
Can BSNL and MTNL reclaim their past glory? It seems unlikely. However, if the government can impose commercial discipline, monetize dead assets, and leverage indigenous technology, BSNL—and to a lesser extent MTNL—might secure a modest, strategically useful slice of India’s fast-growing telecom market. The alternative is a hardened Airtel-Jio duopoly, which policymakers, consumers, and even the private sector should view with caution.
Frequently Asked Questions
Why is the government trying to revive BSNL and MTNL?
The government is trying to revive BSNL and MTNL to restore competitive balance in the telecom sector, ensure rural connectivity, and provide a fallback network in case private systems fail.
What is the current financial state of BSNL and MTNL?
BSNL managed a modest profit last year, driven by growth in various services and government support. However, MTNL’s EBITDA loss widened to Rs 128 crore in Q3 FY25, despite efforts to monetize assets.
What is BSNL's latest revival plan?
BSNL's latest revival plan involves deploying indigenous 4G and 5G technology at over 80,000 sites, aiming to reclaim 25% of the mobile market next year.
What are the challenges faced by BSNL and MTNL?
High wage bills, inefficient processes, and slow decision-making are major challenges. Both firms also struggle with under-investment and shrinking market share.
What is the future outlook for BSNL and MTNL?
While reclaiming past glory seems unlikely, BSNL and MTNL might secure a modest, strategically useful slice of India’s telecom market if the government can impose commercial discipline and leverage indigenous technology.
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