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HomeNewsTelecom NewsGovt announces merger of BSNL, MTNL; merged entity to get Rs 70,000 crore revival package
Thursday, 24 October 2019 05:50

Govt announces merger of BSNL, MTNL; merged entity to get Rs 70,000 crore revival package

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On 23 Oct, the central government made a drastic move by announcing revival package of nearly Rs 70,000 crore for the beleaguered telecom PSUs BSNL and MTNL. Both entities will merge.

BSNL & MTNL together hold about 14% market share in the mobile business. The merger will await sorting out of some operational and regulatory issues since MTNL is a listed company.

The revival package aims to make the loss-making companies competitive again by giving them access to 4G spectrum; helping them retire a large number of employees through an attractive VRS package; and monetising their locked assets such as large swathes of land, and telecom towers.

The Telecom and IT minister Ravi Shankar Prasad said: “BSNL and MTNL are strategic assets of India… they will not be closed, or disinvested, or hived off to any third party.” 

BSNL, with estimated loss of Rs 13,804 crore in 2018-19, has pan-India operations, except for Delhi and Mumbai. The two metro markets are covered by MTNL, whose losses in 2018-19 were pegged at Rs 3,400 crore.

The Minister added the government is confident that the two companies will be operationally profitable over the next two years, and may become fully profitable by the year 2023. 

BSNL and MTNL, once the shining jewels in the government’s PSU line-up, have been a drain on the exchequer for the last decade as competition from private operators hit their businesses hard. They lost subscribers and failed to keep pace with technology changes.

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