MTNL shares zoom 10% as cabinet approves Rs 6,000 crore package for 4G expansion

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MTNL shares zoomed 10.3% in early trade to their day’s high of Rs 57.56 on the BSE on Monday, February 10 after the Union Cabinet approved an additional Rs 6,000 crore funding for Bharat Sanchar Nigam (BSNL) to support its 4G expansion. The funds will address a shortfall in planned capital expenditure for BSNL and its subsidiary, Mahanagar Telephone Nigam (MTNL).

Officials aware of the details told ET that the proposal was approved at the February 7 Cabinet meeting. ET had reported first about the government plan in its September 4 edition.


BSNL, which is also managing the operations of MTNL in Delhi and Mumbai, has been losing customers due to lack of pan-India 4G services. The state-run firm managed to add customers for 3-4 months after private telcos increased tariffs in July last year but has now reverted to losing users.

The companies hope to minimise the users attrition once the 4G services are rolled out across the country. BSNL is also planning to launch 5G soon at select locations, said officials.


Also Read: Stocks in news: Bajaj Auto, Nykaa, Grasim, LIC, Cipla, Hitachi Energy, Sun TV

BSNL in 2023 announced a Rs 19,000 crore advance purchase order for 100,000 4G sites. But when the actual purchase order for network gear was placed with Tata Consultancy Services and state-run telecom equipment maker ITI, it was for about Rs 13,000 crore. The additional Rs 6,000 crore approved now would provide the balance funding. So far, the company has rolled out 65,000 4G sites.The government has invested around Rs 3.22 lakh crore in BSNL and MTNL as part of three revival packages since 2019, including for the rollout of 4G services. As per the government, due to these packages, BSNL-MTNL started earning operating profits from fiscal 2020-21.Also Read: Nifty looks strong with support at 23,400: Analysts

The government had mandated BSNL to roll out 4G based on the locally developed stack by CDoT-TCS combine, brushing aside opposition from top executives within the company who had pushed for tried and tested equipment from global vendors.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)

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