Battling losses and loans, one state-owned telco is pulling ahead of another

BSNL and MTNL have needed state support but their financial trajectories are now diverging

The Department of Telecommunications recently approached the Finance Ministry once again to seek funds to help repay the mounting debt of MTNL, which provides telecom services in Delhi and Mumbai. BSNL, which provides services in the rest of the country, has needed help as well, marking the two state-owned telecom companies’ financial distress.

From FY15 to FY25, BSNL reported cumulative net losses of Rs 85,001 crore. MTNL’s losses were Rs 31,814 crore (as of December 2024). However, there is a contrast in the companies’ recent financial trajectories. BSNL, short for Bharat Sanchar Nigam Limited, is turning around: it reported net profits of Rs 262 crore and Rs 280 crore in the third and fourth quarters of FY25. MTNL (Mahanagar Telephone Nigam Limited) continued to bleed, reporting losses in the first three quarters of FY25. The company is yet to furnish the fourth quarter's results.

BSNL reported a net loss of Rs 8,234 crore in FY15 and Rs 15,500 crore in FY20, but the amount declined to Rs 2,247 crore in FY25, according to data from Lok Sabha papers and the Comptroller and Auditor General. MTNL’s net losses increased from Rs 2,893 crore in FY15 to Rs 3,811 crore in FY20. The losses slightly declined to Rs 2,454 crore in FY21, but the company has continued to post losses every year since. In FY24, net losses stood at Rs 3,302 crore, and for FY25, they have reached Rs 2,495 crore as of December 2024 (chart 1, click image for interactive link).

BSNL’s debt declined from Rs 40,400 crore in March 2022 to Rs 23,297 crore in March 2024, helped by a government revival package and allotment of 4G/5G spectrum amounting to Rs 89,000 crore. MTNL has a larger debt, of Rs 33,568 crore, and it defaulted before seven banks on Rs 8,346 crore between August 2024 to February 2025.

The government gave BSNL budgetary support of Rs 56,785 crore in FY24, Rs 72,027 crore in FY25 (RE) and Rs 33,757 crore in FY26 (BE) in the form of equity subscription. MTNL’s budgetary support was marginal at Rs 1,151 crore in FY25 (RE) and Rs 100,000 in FY26 (BE) in the form of loans.

There is a significant gap in the loss per share (LPS) between BSNL and MTNL. In FY15, BSNL’s LPS stood at Rs 16.5 while MTNL’s was markedly higher at Rs 45.9. By FY19, BSNL’s LPS had increased to Rs 31 and MTNL’s to Rs 58.7. But by FY24, BSNL managed to reduce its LPS drastically to Rs 0.9 and MTNL’s remained high at Rs 52.4 (MTNL is listed and BSNL is not) (chart 2).

Annual company reports show that BSNL’s debt-to-equity ratio was 11.8 per cent in FY15, rose sharply to 88.5 per cent in FY22 and declined to 8.8 per cent in FY24. MTNL’s equity was negative from March 2019 to March 2020. Debt-to-equity ratio was 1.6 per cent in FY21 and 1.3 per cent in FY24.

Debt and losses have affected the subscriber base of both companies. They together had 119 million cumulative wireless subscribers in FY19, with BSNL accounting for 97 per cent of the share and MTNL 2.9 per cent. By FY25, the cumulative wireless subscriber base had shrunk to 92 million, with BSNL’s share rising to 99 per cent and MTNL dropping to 1 per cent. MTNL has said some of its landline services were outdated and it had to shift subscribers to BSNL’s platform (chart 3).