In a recent move, the MTNL board on Wednesday (August 14) has approved a 10 year service agreement with the state-owned telecom provider Bharat Sanchar Nigam Limited (BSNL). The MTNL board also in its latest announcement approved several key decisions.
Here is everything you need to know:
MTNL said in the exchange filing said, "Accorded its approval to enter into a Service Agreement between BSNL and MTNL for a period of 10 years or unless it is revoked earlier by giving a notice of Six (06) months or extended by mutual consent between the Parties, subject to approval of the said Service Agreement by Department of Telecommunications (DoT)/ Ministry of Company Affairs (MCA)."
Duration and Flexibility: The agreement will last for 10 years but can be adjusted or terminated with a six-month notice, or extended with mutual consent.
Regulatory Approval: Furthermore, the recent deal requires the approval of the Department of Telecommunications (DoT) and the Ministry of Company Affairs (MCA), ensuring that it aligns with regulatory standards.
Furthermorem, this deal will mark a significant step in consolidating India's telecom services, as the latest agreement will potentially lead to he improment of the service quality and operational synergy between the two state-owned giants.
Share Sales and Subsidiary Closures
Apart from this, the MTNL board, in the regulatory filing, announced several other changes such as MTNL will sell its stake in its overseas subsidiary, Mahanagar Telephone (Mauritius) Ltd, divesting from MTNL STPI IT Services that is the company plans to sell its shares in MTNL STPI IT Services Ltd.
The sale will comply with the Joint Venture Agreement with STPI and other applicable regulations. If STPI opts out of the purchase, MTNL will explore selling the stake through competitive bidding, the company added in the exchange filing.
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The board has also approved the closure of Millennium Telecom Limited, a wholly-owned subsidiary.
Share performance
The shares of MTNL on Wednesday at 3:30 pm IST closed at Rs 62.95 apiece, up by 4.99 per cent.
