DOT Working On Proposal For BSNL, MTNL Merger: Report

Loss-making state-owned telecom operator MTNL is likely to be merged with ailing BSNL as the telecom ministry has given its consent.

The Department of Telecom (DoT) is "working on" a proposal for merger of BSNL and MTNL as part of efforts to revive the telecom firms.

Telecom Minister Ravi Shankar Prasad had approved the plan last week and now it has been circulated to other ministries for comments, reports HBL.

According to a report, the approved plan also comprised an Rs. 14,155 crore capital infusion to BSNL by the government to acquire 4G spectrum. Besides, the capital infusion, land monetization for meeting the company's expansion plans is also in the pipeline and this will be jointly monitored by BSNL, DoT and Department of Investment and Public Asset Management (DIPAM).

A Special Purpose Vehicle (SPV) would also be constituted for taking the decisions related to land monetization. Also, a Voluntary Retirement Scheme (VRS) for employees above 50 years is in the pipeline as well following which the retirement age will be lowered to 58, the report added.

BSNL's Estimated Loss

BSNL is expected to post-loss over Rs. 14,000 crores for the financial year 2018-19, with a decline in revenue to Rs. 19,308 crore during the same period.

According to a written earlier reply by Telecom Minister Ravi Shankar Prasad in Lok Sabha, the provisional loss of BSNL in 2015-16 was Rs 4,859 crore-Rs 4,793 crores in 2016-17, Rs 7,993 crore in 2017-18.

Our Take On Merger Between MTNL And BSNL

There is no doubt that ever since Reliance Jio has entered into the sector almost all telecom players are facing financial crisis, as the company is offering free voice calls since it started its operations. So it would be interesting to see how the merger between these two wills tough fight to Jio.

However, the merger has been only approved by DOT, and it has to go to Cabinet for approval.