BSNL-MTNL merger: Cabinet to take a call on government’s plan

The government is working on a plan to merge state-run BSNL and MTNL as part of strategy to revive the ailing telecom companies. The Union Cabinet is expected to take a final call on the matter.

According to sources, the merger plan is one of the many components of the revival package, which also includes reducing retirement age from 60 to 58, asset monetisation and allocation of 4G spectrum.

As per an official in the department of telecommunications (DoT), the merger is one of the many components of the overall revival plan as MTNL cannot stand by itself. It is yet to be decided if MTNL will be delisted from the stock exchanges and then merged or will it be just made a subsidiary of BSNL while it continues to be listed.

“Finally, the Cabinet has to take a view on that,” the official said.

MTNL provides telephony services in Delhi and Mumbai, and BSNL is present in the rest of the circles. At present, MTNL is a listed company while BSNL is not.

It must be mentioned that the idea to merge BSNL and MTNL has come up several times in the past. However, as per DoT officials, the idea was never given shape because of the issues related to salary parity of employees and other operational inefficiencies in the merger.

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