BSNL-MTNL Merger Not Feasible, Says Govt Officials; MTNL Can Be Shut Down To Prevent More Loss

After two decades of deliberations, the plan to revive the Bharat Sanchar Nigam (BSNL) and Mahanagar Telephone Nigam (MTNL), by merging the two entities is about to be shelved, as per the reports. 

Why Would This Happen?

The same is suggested by a six-member group of ministers (GoM), mandated to take a decision on the matter.

They further recommended that a merger would neither be beneficial nor feasible, thereby closing a long-drawn chapter in the telecom sector last week.

As per their suggestion, the government might shelve a plan to merge state-run telecom players BSNL and MTNL.

Soon, the Union Cabinet will meet and formally decide on the merger of Bharat Sanchar Nigam (BSNL) and Mahanagar Telephone Nigam (MTNL).

DOT In Favour

According to the sources, the Department of Telecommunications (DoT) is also in favor of scrapping the merger.

The above mentioned GoM comprises Finance Minister Nirmala Sitharaman, Telecom Minister Ravi Shankar Prasad, Commerce Minister Piyush Goyal, Home Minister Amit Shah, Petroleum and Natural Gas Minister Dharmendra Pradhan.

The GoM decided to vote against combining the two entities in order to prevent further erosion of BSNL’s value.

BSNL MTNL Revival Plan

Prior to this, the Union Cabinet has approved a 4-way revival plan for BSNL to help them to survive, and operate during October 2019.

The said package included Rs 15,000 crore which will be raised through sovereign bonds, and monetization of real estate assets with BSNL, to the tune of Rs 38,000 crore.

At that time they further decided on the BSNL and MTNL merger to provide telecom services to the metros.

As we know that  MTNL is a listed company, hence this merger is expected to be complicated, no doubt.

The plan was to keep MTNL as a subsidiary of BSNL and continue to operate independently Till the time this merger is complete.

So That, both the companies can survive.

At that time Telecom Minister Ravi Shankar Prasad made it clear that BSNL will be neither shut down nor the disinvestment will be done.

“Neither BSNL nor MTNL will be closed, disinvested or sold off but the government wants to make them professional,” He said.

Let’s watch this space to know the future of the country’s telecom players.