The memorandum dated 12 October was issued to all secretaries and departments under the Centre following consultation with the finance ministry
The central government has mandated all ministries, public departments and public sector units to use telecom services of state-run Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL).
"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," a memorandum dated October 12 issued by the Department of Telecommunications (DoT) said.
Following consultation with the finance ministry, the memorandum was issued to all secretaries and departments under the Centre.
The Department of Expenditure's note accompanying the memorandum mentioned that the decision to mandate the use of BSNL and MTNL telecom service was taken by the Cabinet.
"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.
The order comes as a relief for the loss making state-run telecom firms who have been losing their wireline subscriber base. BSNL recorded a loss of ₹15,500 crore and MTNL posted a loss of ₹3,694 crore in 2019-20.
BSNL's wireline subscriber base has eroded from 2.9 crore in November 2008, to around 80 lakh in July this year. MTNL's fixed line customers have come down from 35.4 lakh in November 2008, to 30.7 lakh in July this year.
State-run telecom firm BSNL has raised more than ₹8,500 crore through sovereign guarantee bonds to expand its network and manage operational expenses. MTNL is yet to raise ₹6,500 crore through sovereign bonds which was approved by the Cabinet in October 2019, as part of its revival package.
Last month, the state-run telecom firm raised over ₹8,500 crore through sovereign guarantee bonds with government funds and PSU banks participating in the issue.
BSNL Chairman and Managing Director P K Purwar said the firm is also planning to monetise assets worth ₹18,000 crore within a year and expects the loss-making company to become operationally profitable in the financial year 2021.