As state-owned Mahanagar Telephone Nigam (MTNL), which provides telecom services in Delhi and Mumbai circles, continues to struggle with declining revenues and mounting losses in a fiercely competitive market, the government is finally exploring the option of shutting down the debt-laden firm and monetise its land, buildings and tower business. What has forced the government to explore the option is that MTNL\u2019s 20-year licence fee will come up for renewal in April next year, which would require the company to pay an unaffordable Rs 11,000 crore. Sources told FE that closing MTNL\u2019s operations is feasible from all angles barring one \u2014 it has a huge staff strength of 27,919 which needs to be taken care of. Barring the group A officers who are mostly Indian Telecom Service officers on deputation from the department of telecommunications, bulk of the workforce belongs to the company and this segment would resist any attempt of closure. As far as the firm\u2019s mobile subscribers are concerned, they can easily port out to other operators which has happened of late when some private operators shut down their services. MTNL\u2019s landline business can be assigned to fellow PSU, BSNL which currently does not have presence in Delhi and Mumbai. In the past, different governments explored the possibility of merging MTNL and BSNL and creating one single company but it could not fructify because of HR-related issues. Any merger is not possible today because even BSNL is incurring losses for the past 5-6 years and is saddled with a huge workforce. Unlike BSNL, the land and real estate asset of MTNL can be monetised as their ownership vests with the company. It has a total of around 2.5 million sq ft of commercial land and 4 million sq ft of residential assets, spread over the two cities and a large part of these can be monetised either through sale or leasing for commercial purposes. In fact, some time ago, the company had got a valuation of its property done by the real estate consultancy firm Jones Lang LaSalle, which had said that it can raise around Rs 4,000 crore through a combination of selling its land bank and leasing its buildings. A look at the company\u2019s financials prove that it is beyond redemption. Its employee cost is at an unsustainable level of close to 100% of its revenues. Its losses are more than its revenue \u2014 the company reported a net loss of Rs 2,941 crore in 2016-17 while revenues were at Rs 2,870 crore (see chart). It is meeting annual interest costs of about Rs 1,500 crore by taking more loans. In its annual report for 2016-17, the company acknowledged the danger its handicap and protrayed a bleak outlook by saying:\u201cBecause of high leverage and heavy repayment schedule of loans as well as interest payment to banks and financial institutions in the coming years, there is possible risk of liquidity crunch in near future, which will be a great threat to MTNL to keep it as ongoing concern in near future". The company has already conveyed to the department of telecommunications its inability to provide over Rs 11,000 crore by April next year to pay for one-time spectrum charges and other fees to the government to renew its 2G licences. Being in a debt trap of Rs 19,510 crore as on March 31, 2017 (including Rs 4,533.97 crore of the bonds, the liability for interest and principle of which are with the Centre), it is not even in a position to meet the capex requirement to upgrade its telecom infrastructure. The policy of the NDA government has been to get rid of non-viable units and invest its scarce resources on developmental programmes. As per this policy, the Niti Aayog has recommended winding up over two dozen ailing PSUs, many of which are currently under the closure process.In order to facilitate the process, the settlement of statutory dues and payment to secured creditors are now being completed within two months after the Cabinet approval. It has set timelines for the disposal of movable assets, sale of land and retrenchment of employees not opting for voluntary retirement scheme (VRS) to fast-track the closure of sick PSUs. MTNL has land and buildings at premium location in Delhi and Mumbai which could fetch a substantial amount, if monetised. According to the annual report of MTNL, the gross value of its property, machinery and equipment were about Rs 10,000 crore on March 31, 2017. According to the department of public enterprises\u2019 guidelines issued in FY16, the sick units would be closed within one year from the date of issue of minutes of the Cabinet approval. However, the process practically drags on for years. The Centre holds a 56.9% stake in MTNL, Life Insurance Corporation 18.81% and the balance stake is with the public.