Home >Industry >Telecom >Government defers plan to merge BSNL with MTNL

New Delhi: The government has deferred the merger of Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) due to financial reasons, including high debt of the latter, communications, electronics and information technology minister Ravi Shankar Prasad said.

“However, close cooperation and service integration between BSNL and MTNL has been undertaken," said Prasad in a written reply in the Lok Sabha on Wednesday.

The Union cabinet in October 2019 approved a revival plan for the state-owned telcos including their merger to help turn around the two money-losing companies. As part of the revival plan, the government also announced a voluntary retirement scheme (VRS) to slash employee cost. MTNL has a total debt of 20,000 crore.

The merger and revival plan, which was estimated at 69,000 crore, included capital infusion of 20,140 crore by the Centre to meet the cost of spectrum for BSNL’s 4G roll-out. The government also agreed to bear the goods and services tax (GST) amount of 3,674 crore on the overall spectrum cost. The turnaround plan included issuing sovereign bonds worth 15,000 crore to be serviced by the two companies. Besides, assets worth 38,000 crore will be monetized in four years.

In January, the department of telecommunications (DoT) said BSNL and MTNL’s operating performance or earnings before interest, tax, depreciation and amortization (Ebitda) turned positive in the first six months of the current financial year.

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