A SERVICE AGREEMENT between state-run MTNL and BSNL will enable the former to take debt from the latter for maintenance of its assets in the form of inter-corporate debt (ICD).
The agreement is part of the arrangement wherein MTNL's telecom services in Delhi and Mumbai circle will be run by BSNL, which does not provide services in these two circles.
MTNL's revenue and Ebitda (earnings before interest, taxes, depreciation, and amortisation) have been declining over several years and the telco has consequently defaulted in repayment of its debts and liabilities.
With the BSNL service agreement, the government wants to operate MTNL on an Ebitda-neutral basis.
Analysts, however, said the success of such a structure is dependent on the success of 4G and 5G in Delhi and user wins.
Even for maintaining MTNL's assets, BSNL, which is also loss-making, may face financial strain if it has to repeatedly step in, especially if MTNL's losses continue over the long term, analysts said.
This story is from the December 20, 2024 edition of Financial Express Lucknow.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the December 20, 2024 edition of Financial Express Lucknow.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
ICICI Lombard Q3 net profit surges 68% to ₹724 crore
ICICI LOMBARD GENERAL Insurance on Friday posted a 68% year-on-year increase in its third-quarter net profit at ₹724 crore.
Imran Khan gets 14-year jail term in graft case
A PAKISTANI COURT on Friday sentenced jailed former prime minister Imran Khan and his wife Bushra Bibi to 14 and seven years in prison respectively after finding them guilty of corruption in the 190 million pounds al-Qadir Trust case.
RBI: Ensure nominations in all bank accounts and lockers
THE RESERVE BANK (RBI) on Friday asked banks to ensure nominations in new and all existing customers' deposit accounts and safety lockers, highlighting that a large number of accounts do not have nominations.
Jio Financial Q3 net profit remains flat at ₹295 crore
JIO FINANCIAL SERVICES on Friday reported a consolidated net profit of ₹295 crore for the quarter ended December 31, 2024, which was flat versus ₹294 crore posted in the year-ago period.
Hamas to Release First Hostages on Sunday
ISRAELI CABINET RECOMMENDS GAZA CEASEFIRE DEAL
IMF, World Bank Peg India's FY25 Growth at 6.5%
The International Monetary Fund (IMF) has retained India's GDP growth forecast to 6.5% for the current financial year, which is \"in line with potential\".
RIL's O2C segment set to bounce back in FY26
REFINING BOOST FOR SEGMENT GROWTH SEEN: ANALYSTS
Harvest tax-free capital gains
● It will reduce your future tax liability from equity holdings
Coldplay fans flock to resale sites for tickets
POPULAR BRITISH ROCK band Coldplay will be performing at the DY Patil Stadium in Navi Mumbai on January 18, 19 and 21 and at Ahmedabad's Narendra Modi stadium on January 25 and 26.
Will not attend Trump inaugural, says Nvidia CEO
Jensen Huang said on Friday he will not be attending U.S. President-elect Donald Trump's inauguration, but will instead be \"on the road\" celebrating the Lunar New Year with employees and their families.
