India has kept plans to sell its stake in Mahanagar Telephone (Mauritius) Ltd, the Mauritius-based telecom unit of debt-laden state carrier Mahanagar Telephone Nigam Ltd, on hold as the government moves to preserve its presence on the island, according to officials familiar with the matter.
The company's board had cleared the move to exit Mauritius in August 2024 as part of a wider plan to monetize non-core assets and pay off debt.
The external affairs ministry is not aligned with the proposed sale for strategic reasons, one of the officials said, asking not to be identified while discussing internal deliberations. India and Mauritius upgraded ties in March 2025.
The telecom firm’s Mauritius arm operates under the CHiLi brand and was started 20 years ago. It generated about ₹79 crore revenue in the year ended March, down 3% from a year earlier, with losses increasing to ₹6.5 crore.
“As of now, there is no plan to sell stake in the Mauritius entity. The ministry of external affairs was also not on board in exiting that stake as they consider the territory as having geopolitical significance,” a second official said, adding that Mauritius is a small business for MTNL, and the sale would not have fetched much.
- Government halts MTNL's Mauritius stake sale, citing geopolitical importance over financial pressure.
- MTNL's total liabilities hit ₹37,223 crore, with all bank loans now NPAs.
- The external affairs ministry blocked the sale despite Mauritius being a small business.
- Former Trai official suggests selling 49% stake to Indian investors instead.
- MTNL's FY26 loss narrowed to ₹3,107 crore, but revenue fell over 15%.
Queries emailed to department of telecommunications (DoT), the external affairs ministry, and MTNL did not elicit any response till press time.
Employees deputed from the parent manage the company’s operations. Over 10 MTNL employees are on deputation in Mauritius, in addition to local outsourcing for other work, according to DoT’s FY26 annual report.
Mauritius has a population of 12.5 lakh and has a mobile teledensity of over 170%, according to the report. It has a customer base of over 4 lakh and is now moving to launch 5G services there.
Teledensity is the number of telephone connections per 100 people in an area. A teledensity over 100% indicates multiple connections/SIMs per person.
Case for partial stake sale
All the company's expenses are paid from its internal resources, including capital expenditure for equipment procurement, DoT said in its report, adding that the Mauritius entity has no debt.
“Building on its experience with CDMA-based mobile networks, MTNL first entered the Mauritius market with its 2G services. It actually makes sense for the government to sell 49% stake and retain the ownership with a 51% control. The money from the stake sale can be used for BSNL expansion in India or to repay some part of MTNL’s debt,” said Satya N. Gupta, former principal advisor at the Telecom Regulatory Authority of India (Trai).
According to Gupta, the government can sell it only to Indian companies or investors to maintain India’s strong presence in the market and create opportunities for improvement in the Mauritian business going forward.
To be sure, Mauritius has also been an important destination for companies looking to set up entities because of its relatively business-friendly environment and tax treaties that can help prevent double taxation.
MTNL, currently managed by BSNL, incurred a loss of ₹3,107 crore in FY26, lower than the ₹3,328 crore loss in FY25. The company’s revenue from operations fell 15.3% on-year to ₹956 crore in FY26. The company faces liabilities of ₹37,223 crore as of June-end and has defaulted on interest and instalment repayments on its bank loans, thereby classifying all its bank debt as non-performing assets.
BSNL and MTNL signed an agreement effective 1 January 2025, as per which the former is running MTNL’s telecom services, including maintenance and operational activities, on Ebitda-neutral basis.
Of the total liabilities, MTNL’s bank debt stood at ₹9,495 crore as of June-end.
In the June quarter, the company incurred a net loss of ₹842 crore, compared to ₹943 crore in the year-ago period. Its revenue from operations fell 41.5% on-year to ₹217 crore during the quarter.
Last month, communications minister Jyotiraditya Scindia, in response to a question on MTNL in the Lok Sabha, said that against total liabilities of approximately ₹40,000 crore, MTNL holds about ₹50,000 crore in non-core assets in market value terms.
The minister said that the government is not considering implementing any new restructuring plan for MTNL in the near future.
On Friday, MTNL shares ended 0.7% lower at ₹26.36 on the National Stock Exchange.