Government defers proposal to merge BSNL, MTNL due to financial reasons

The Government on Wednesday informed Parliament that it has deferred the merger of state-run telecom firms BSNL and MTNL due to financial reasons.

"Government has approved the revival plan of Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) on October 23, 2019, which inter-alia includes in-principle approval for the merger of MTNL and BSNL. Due to financial reasons including high debt of MTNL, the merger of MTNL with BSNL is deferred," Minister of State for Communications Devusinh Chauhan said in a written reply to the Rajya Sabha.

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The Centre has recently renewed its plans to merge Bharat Sanchar Nigam Ltd (BSNL), Mahanagar Telephone Nigam Ltd (MTNL) and Bharat Broadband Network (BBNL) to establish a single telecom entity. BBNL is responsible for implementing the BharatNet project.

As on January-end, the combined debt of BSNL and MTNL was Rs 59,588 crore. Adjusted gross revenue (AGR) dues, which includes licence fee and spectrum usage charges, of the two telecom firms is Rs 43,148 crore at present.

However the BSNL Employees Union has urged the government to drop plans of merging the telecom behemoth with MTNL, saying the merger would do “irreparable damage” to the ailing telecom giant.

“BSNL is struggling hard to come out of its financial crisis. In this situation, if MTNL is merged with BSNL, it will only do irreparable damage to the financial revival of BSNL,” employees union said in its letter to Prime Minister Narendra Modi.

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