Rs 69,000 Cr BSNL-MTNL Merger Plan Cancelled Due To This Reason; What’s Next For BSNL?
In a big set back to thousands of BSNL and MTNL employees who were expecting a revival after their mergers, all such plans have been cancelled.
What’s next for BSNL and MTNL now?
Govt Cancels BSNL-MTNL Merger
In a surprise move, Govt of India has decided to cancel the Rs 69,000 crore BSNL-MTNL merger, which was announced in 2019 to revive the state-owned telecom carrier.
In a written reply, Communications, Electronics and Information Technology Minister Ravi Shankar Prasad informed the Lok Sabha that the merger has been cancelled.
However, he added, “However, close co-operation and service integration between BSNL and MTNL has been undertaken,”
What’s The Reason?
Merging two huge telecom entities needed a lot of resources, man-power and money. It seems Govt of India doesn’t seem to agree to spend so much resources into this exercise.
And thus, this is the main reason why the merger has been cancelled as of now.
VRS scheme for all BSNL and MTNL employees aged 50 years or above was part of the revival plan, and this has already been executed. Govt had allocated a budget of Rs 25,000 crore for the VRS plan, which included Rs 14,366 crores for Ex-Gratia on VRS and Rs 11,331 crores pensionary benefits for all retired employees for 10 years.
Besides VRS, the other revival plans included merging of the assets of both BSNL and MTNL and to ensure that the companies survive by fighting the battle together.
But it seems that besides the VRS, the other revival plans won’t be executed.
What’s Next For BSNL, MTNL?
As of now, the primary concern is roll out of 4G services by BSNL, that can help them to attract new customers and increase revenues.
And the other big concern is the massive pile of debt that both BSNL and MTNL has to repay to the vendors, Govt, and partners.
Both BSNL and MTNL has approximately Rs 45,000 crore combined debt.
And for 4G services, there is still no definitive timeline.
In short, future for both BSNL and MTNL looks bleak, to say the least.
We will keep you updated as more details come in.