BSNL-MTNL Merger Gets Government's Nod

The Indian government has finally approved the merger between BSNL and MTNL, along with the 4G spectrum allocation to the telecom operators. According to the government, "Spectrum will be funded by the government of India by capital infusion in these PSUs at a value of Rs. 20,140 crore in addition; the GST amount of Rs. 3,674 crore to this spectrum value will also be borne by the Government of India through Budgetary resources."

Besides, the government has decided that both telcos will provide a Voluntary Retirement Scheme (VRS) to their employees. However, this VRS applies to those attaining 50 years and above.

While announcing the merger between the two operators, Telecom Minister Ravi Shankar Prasad informed PTI that "The VRS package approved by the Cabinet will give eligible employees 125 percent of income that they would have earned by serving the company till the age of 60 years. With this decision, we have taken care of the interest of lakhs of employees of these PSUs." Adding to that, "The government is not going to force anyone to take VRS."

Meanwhile, the government is planning to monetize MTNL and BSNL assets of Rs. 37,500 crore in three years. "The assets primarily include land assets but also rental and leasing of their buildings. MTNL has around 29 retail outlets in Delhi alone," Telecom Secretary Anshu Prakash was quoted by the news agency.

On the other hand, MTNL chairman and MD Sunil Kumar believe that the VRS scheme offered by the government is very attractive, he also expects that all employees who eligible for it will take it.

The merger between the two PSUs has been under discussion for 10 years, but there were many HR issues. At present, both MTNL and BSNL are sitting on Rs. 40,000 crores debt. The cut-throat competition in the telecom sector forced Vodafone and Idea to merge their operations as well.