Last week, Mahanagar Telephone Nigam Limited (MTNL) board took action. They were working on matters of the utmost importance for the state-controlled telecommunications service operator, which has its service areas in and beers rule unitary states Delhi and Mumbai. That is the way things are for it from today onwards.
BSNL New Service Agreement
The most important decision made at the meeting last week was MTNL. After the meeting, they will sign a service agreement for 10 years with Bharat Sanchar Nigam Limited (BSNL). This contract is made mutual acceptance; it may be terminated by either side within 6 months.
The decision encourages cooperation between the two state companies, which should improve service and efficiency. Both parties have agreed to the deal, which is now subject to approvals from relevant authorities.
Closure of Millennium Telecom Limited
One of the other key decisions was the in-principle approval for closing Millennium Telecom Limited (MTL), a wholly-owned subsidiary of MTNL. The closure will be done in accordance with the DIPAM rules and in compliance with all existing laws from the SEBI perspective, as well as other company acts.
On Wednesday, the board of MTNL also approved the sale of its shares in two subsidiaries: MTNL STPI IT Services Ltd (MSITS) and Mahanagar Telephone (Mauritius) Ltd (MTML). It added that the offer for sale will be made according to the joint venture agreement and relevant DIPAM guidelines.
The move is one step in MTNL’s plan to divest from its other businesses that the state-run firm considers non-core to focus solely on telecom services. MTML is an overseas subsidiary, so Mauritius’s local laws and regulations will also apply to transactions related to its sale.
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Financial Performance in Q1
With backing from its parent company, the nation’s largest telecommunications firm plans to run an initial investment of 1 billion rupees; it was reported by MTNL. The service division continued to suffer heavy losses. However, after these costs are accounted for, the parent will make up the difference for it.
MTNL’s revenue was ₹183.9 crore, 7.8% less than what it had earned during the same time last year, ₹199.5 crore. However, its net loss narrowed to ₹773.5 crore from ₹851.9 crore in the previous year. Nevertheless, MTNL is still forging ahead with its strategic realignment and cooperation for the sake of stability despite these financial difficulties.
Moreover, these strategies, such as partnering with BSNL and divestment of stakes, help MTNL achieve operational efficiency and improve its finances amid continued challenges that beset the telecommunication industry when it comes to profitability or market share acquisition.
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