Govt Attempting To Revive BSNL By Merging With MTNL, Bharat Broadband: How Will It Work?

The government has been developing a proposal to merge BSNL, MTNL and BBNL into a single state-owned telecom entity.

And now, the proposal is being revised, yet again!

Government Revives MTNL And BSNL Merger Plans

Sources have confirmed that  the department of telecommunications (DoT) has floated a draft Cabinet note about the merger of these three entities into one single financially viable telecom firm.

As per reports, the government is planning to invest Rs 1.6 trillion towards this. Of this, Rs 36,260 crore will be cash support for BSNL/MTNL for the next three years.

As we shared recently, the state-run Bharat Sanchar Nigam Limited (BSNL) employees group Wednesday said that the proposed merger between the Mahanagar Telephone Nigam Limited (MTNL) and BSNL would do irreparable damage to the revival plan approved by the cabinet for the latter.

In November, we shared that a package worth nearly Rs. 1.3 trillion ($17.54 billion) has been drafted to revive both the state-run telecom companies MTNL and BSNL. The rest of the package would be divided into around Rs. 50,000 crore of spectrum payment dues and 360 billion rupees of pending adjusted gross revenue payments.

What Is The 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. They further decided on the BSNL and MTNL merger to provide telecom services to the metros.

As we know, MTNL is a listed company, and 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 both the companies can survive.

At that time, the 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.

We recently shared that BSNL and MTNL will receive financial support of Rs 7,443.57 crore from the government to implement a voluntary retirement scheme or VRS.