BSNL MTNL

Reeling under massive financial loss over the past few years, state owned telco BSNL and MTNL have inked a memorandum of understanding (MoU) to share the infrastructure and network of each other, in a bid to offer better services to their consumers.

The details of this partnership is sparse right now, since there is no information on this partnership on either BSNL website or the MTNL website. A Business Standard report suggests that BSNL and MTNL will be sharing infrastructure like buildings, mobile masts, international long-distance phone networks to provide joint services to corporate customers. However, this is not new since BSNL and MTNL already shared infrastructure earlier i.e. a BSNL customer automatically switched to MTNL in Delhi and a MTNL customer switched to BSNL in Bangalore.

It also mentions that both the companies are working on an arrangement through which the roaming charges will be gradually reduced and eventually waived off. Remember that BSNL currently operates in all telecom circles besides Delhi and Mumbai while MTNL operates only in Delhi and Mumbai.

While the implications of this agreement is not clear yet, but maybe this means that BSNL can now rollout services in Delhi and Mumbai circles while MTNL can expand its services beyond Delhi and Mumbai. If so, then how different is this partnership from the 3G intra circle roaming deals inked by private telcos back in 2011, which allowed them to offer 3G services in areas where they don’t have a 3G license.

DoT had then declared these arrangements were illegal since the agreements were against the telecom licenses and would lead to loss of revenue to the government and had sent notices to Airtel, Vodafone and Idea, ordering them to scrap the 3G intra-circle roaming pact, since these pacts were illegal. Yesterday, the Supreme Court had reportedly asked Bharti Airtel to move to the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) on the 3G intra-circle roaming agreements issue and had directed the tribunal to decide on the case by end of December.

Last month, MTNL had reported a massive Rs 1256.2 crore loss for the quarter ended June 30th 2013, up 18.59% year on year, although losses were lower by 36.75% sequentially. While BSNL is not a listed company, BSNL had reported a total loss of Rs 6,536 crore for the nine month period ending December 31, 2012.