mtnl share price, stock high of 25 rupees, rush to buy shares of debt market company, let’s see what happens – mtnl share price telecom company stock climb 14 percent after one news check deets
What is the reason for the boom in shares?
The government has approved a huge package of Rs 1 lakh 64 thousand crores to help Bharat Sanchar Nigam Limited i.e. BSNL. Responding to supplementary questions during question hour in the Lok Sabha on Wednesday, Communications Minister Ashwini Vaishnav said that the package will completely change the face of Sanchar Nigam. Vaishnav said that BSNL will implement indigenously developed 4G and 5G technologies. He said that engineers in India have developed 4G and 5G technologies in line with Prime Minister’s Make in India initiative, which is a matter of pride. Along with this, the government is also going to encourage MTNL. It may be noted that BSNL-MTNL merger has already been approved.
BSNL-MTNL loss of thousand crore rupees since inception
The state-owned telecom operator, BSNL, reported a loss of Rs 57,671 crore since its inception, while MTNL suffered a loss of around Rs 14,989 crore till March 2022. According to the government, personnel costs, market competition and debt burden are the main reasons for the losses.
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Therefore, the government is trying to revive these loss-making companies. In 2019, a revival plan was approved for BSNL and MTNL which included reduction of staff costs through VRS, guarantee bonds, administrative debt restructuring. It also includes allocation of spectrum for 4G services through capital infusion, monetization of core and non-core assets and in-principle approval for merger of BSNL and MTNL.