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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.“In case at any point in time, the Ebitda (of MTNL) becomes negative, then BSNL shall step in with its own funds, towards maintenance of the assets, the funds will be extended by BSNL as inter-corporate debt (ICD),” the service agreement between the companies, seen by FE, said.“In case Ebitda is positive (non-zero) then it shall be used to settle the ICD of BSNL to ensure Ebitda neutral operation of MTNL and if any further funds are available then they can be used to settle other liabilities or outstanding debts,” the agreement added.The service agreement between BSNL and MTNL will come into effect from January 1, 2025 for a period of 10 years.

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MTNL will provide assistance in ensuring a smooth rollout of such 4G & 5G services in Delhi and Mumbai circles.BSNL will incur capex and opex for running the entire operation in Delhi and Mumbai.

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