New Delhi: A latest policy directive from the central government has asked all ministries including public departments and PSU units to utilize telecom services only from Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL).
The directive from the Department of telecommunications reads, "The government of India has, inter-alia, approved the mandatory utilisation of capacities of BSNL and MTNL by all ministries/departments of government of India, CPSEs, central autonomous bodies..."
"All ministries/departments are accordingly requested to issue necessary instructions including to CPSEs/Central Autonomous organisations under their control for mandatory utilisation of BSNL/MTNL network for internet/ broadband, landline and leased line requirements," the DoT memorandum said.
Announced on October 12, the memo has been despatched to all ministries and departments after consultations with the Finance Ministry. A note from the Department of Expenditure says that the decision was taken by the Cabinet.
The move should come as a relief for the state run telecom PSUs considering their woeful performance in recent times. BSNL in 2019-20 posted a Rs 15,500 crore loss while MTNL made a loss of RS 3,694 crores.
Both telcos also posted a loss in subscribers. In the case of BSNL, wireline subscriber base dipped from nearly 3 crores (2008) to 80 lakhs (Jul'20).
Both the firms have raised funds from Sovereign guarantees. BSNL has raised Rs 8,500 crores while MTNL was approved of a Cabinet committee to raise Rs 6,500 crores for revival.