MTNL And BSNL To Merge Together Against Huge Debt


The Indian government approved a package of Rs 68,751 crore for loss-making public sector telecom companies – BSNL and MTNL. This includes the merger of MTNL with BSNL. Apart from that Voluntary Retirement Scheme (VRS) for employees and 4G spectrum allocation has also been done. It is now clear that BSNL, MTNL will neither be closed nor will it be handed over to any third party and neither will any stake be reduced. The government approved the in-principle merger of the two telecom companies.

Sharing information related to the package, Telecom Minister Ravi Shankar Prasad said that the merger of BSNL and MTNL has been approved. MTNL will act as a subsidiary of the major telecom company BSNL till the merger process is completed. The revival package provided government bonds worth Rs 15,000 crore, Rs 20,140 crore for 4G spectrum, Rs 29,937 crore for employees’ VRS and Rs 3,674 crore as GST to meet the immediate capital needs of both companies.

BSNL spokesman Sanjay Sinha said that the company has paid salaries to all its employees for September. MTNL plans to pay the salary for August by October 24. Telecom Secretary Anshu Prakash said that BSNL and MTNL will get relief from the debt raised through bonds. Prakash said, “BSNL has the lowest debt in the entire telecom industry. It can raise capital from banks to meet her capital expenditure needs. However, how they want to do it will be the decision of the board of directors of BSNL.

Both companies have been demanding 4G a spectrum for a long time to remain competitive in the market so that 4G services can be started. Telecom Secretary Anshu Prakash said that both companies will be allocated spectrum at an administrative level within a month. Prakash said, “BSNL will be allocated spectrum of Rs 14,115 crore for equity shares and MTNL will be allocated spectrum of Rs 6,295 crore instead of preference shares.