BSNL, MTNL merger unlikely; cabinet to take final call soon: Report

The plan to revive ailing state-run telcos Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) by merging them together may not realise as a six-member group of ministers (GoM) last week recommended that the merger would neither be beneficial nor feasible, reported Business Standard on Monday.

The Union Cabinet, however, will take a final call on the issue soon, it added.

The plan to merge the beleaguered telcos goes back to October 2019 when the Cabinet had announced a four-step revival process worth Rs 68,751 crore that included the allocation of 4G airwaves, voluntary retirement scheme (VRS), assets monetisation, and a merger plan between the two telcos which was expected to finalise in 24 months.

But with the latest developments, it seems highly unlikely now.

It is pertinent to note that BSNL recently started operating its counterpart MTNL’s network in Delhi and Mumbai circles. This came after BSNL’s proposal to the telecom department on October 27 last year, expressing interest to manage networks in the metropolitan circles on an outsourcing basis.

“As proposed by BSNL earlier vide its letter dated October 27, 2020, and agreed by MTNL, BSNL will run the mobile network of MTNL as its outsourced agency from January 1, 2020. The necessary formalities in this regard may please be completed accordingly, the DoT in a letter dated December 31, 2020, to BSNL chairman Pravin Kumar Purwar had said.

Further, on December 16, the department had granted a unified license that included Delhi and Mumbai telecom service areas, making the telco eligible to offer mobile and fixed-line services in two metropolitans.

Additionally, BSNL is also expected to launch 4G telecom services through Delhi and Mumbai circles.

BSNL and MTNL both hold a telecom market share of close to 10.75%.