MTNL's Mauritius exit blocked by foreign ministry on strategic grounds

India has shelved plans to sell its stake in MTNL's Mauritius unit after the external affairs ministry objected, officials said, marking a rare instance where geopolitical considerations have trumped a state-run company's debt-reduction strategy.

The board of Mahanagar Telephone Nigam Ltd, the debt-laden state carrier, cleared the exit from Mahanagar Telephone (Mauritius) Ltd in August 2024 as part of a wider push to monetize non-core assets. The Mauritius arm, which operates under the CHiLi brand, generated about ₹79 crore in revenue for the year ended March – down 3% from a year earlier – while losses widened to ₹6.5 crore.

The external affairs ministry is not aligned with the proposed sale for strategic reasons, one official said, asking not to be identified while discussing internal deliberations. A second official put it more directly. "As of now, there is no plan to sell stake in the Mauritius entity," the person said. "The ministry of external affairs was also not on board in exiting that stake as they consider the territory as having geopolitical significance."

India and Mauritius upgraded their bilateral ties in March 2025. The island nation, with a population of 1.25 million and mobile teledensity above 170%, has a customer base of over 400,000 and is preparing to launch 5G services.

Mauritius is a small business for MTNL, and the sale would not have fetched much, the second official said. Over 10 MTNL employees remain on deputation there, according to the Department of Telecommunications' FY26 annual report, alongside local outsourcing for other work. The Mauritius entity carries no debt, with all expenses including capital equipment paid from internal resources, DoT said.