A Group of Ministers has advised against the BSNL–MTNL merger, Business Standard reported. This essentially ends any prospect of the merger between the two debt-ridden telecom operators from happening; the Union Cabinet is reportedly set to formalise a recommendation that the merger be averted. The combination is a part of a ₹29,000 crore revival plan for the state-owned telcos, which have just completed implementation of a Voluntary Retirement Scheme to reduce their payroll expenses.
The GoM reportedly said that merging BSNL and MTNL would burden the larger telco’s finances heavily. MTNL operates almost exclusively in the national capital and Mumbai, and abroad in Mauritius. The revival plan also reportedly involves monetising both telcos’ assets and merging the telcos’ networks, with many staff moving to BSNL from MTNL.
Both BSNL and MTNL recently turned EBITDA-positive in 2020, the government said, due to the lighter workforce. Though neither telco is profitable, the government insists on preserving BSNL as a strategic state asset. The government is also pushing for BSNL’s yet-unrealised 4G deployment to have an Indian-built core. 20% of the core’s components can be supplied by ITI Limited, a government-owned entity, a Department of Telecommunications-instituted committee recommended recently.
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