Mahanagar Telephone Nigam Limited (MTNL) has proposed to the Department of Telecommunications (DoT) to sell a 50 per cent stake in the former’s wholly-owned unit Millennium Telecom (MTL) to Bharat Sanchar Nigam Limited (BSNL) to create an equally owned joint venture for the Digital India project. MTNL's plan to join BSNL for the Digital India services comes ahead of the merging the two state-run telecom companies by the government.

The proposal aims at developing a cost-efficient business strategy for MTL. Given that MTL is not a licensed telecom operator, it will have a negligible licence fee payout obligation to the government. Subsequently, either MTNL or BSNL can use their annual revenue generated from the Digital India project as licence fees for MTL if they participate directly in the project.

MTNL is of the view that MTL with its reduced tax burden will be more competitive than either MTNL or BSNL to deliver low-cost citizen services in the project. Further, after the stake sale to BSNL, MTL will work with IT systems integrators and content developers to develop multi-lingual applications and content relevant for delivering citizens' services across the various social services’ verticals for the Digital India project.

MTL is a subsidiary of MTNL formed in February 2000 and has been exploring the new different business prospects like infrastructure sharing, data centre outsourcing application including web hosting, cloud computing and providing turnkey solutions.