Government approves BSNL, MTNL merger; employees given voluntary retirement option

MTNL, largely present in major Indian cities, will act as a unit of BSNL until the merger is completed.


India plans to merge loss-making state telecom providers Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd, giving employees the option to retire voluntarily, the communications minister said on Wednesday.

A woman speaks on her mobile phone in front of the logo of Bharat Sanchar Nigam Ltd (BSNL) painted on a wall outside its office in Kolkata, India, August 24, 2017. Picture taken August 24, 2017. Image: Reuters.

A woman speaks on her mobile phone in front of the logo of Bharat Sanchar Nigam Ltd (BSNL) painted on a wall outside its office in Kolkata, India, August 24, 2017. Picture taken August 24, 2017. Image: Reuters.

The two carriers have struggled to win customers at a time Reliance Industries’ telecoms’ upstart Jio and rivals Bharti Airtel and Vodafone Idea have rolled out 4G services and cut prices on voice and data.

“Neither BSNL-MTNL is being closed, nor is being disinvested, nor is being hived (off) to any third party,” minister Ravi Shankar Prasad told a news conference to announce a plan to resuscitate the two companies.

“We want to make them competitive, bring in professionalism.”

MTNL, largely present in major Indian cities such as Delhi and Mumbai, will act as a unit of BSNL until the merger is completed, Prasad said. He didn’t provide a date for the merger.

BSNL had 116 million subscribers in August, according to data from India’s telecoms regulator.

New Delhi will raise 150 billion Indian rupees ($2.12 billion) via sovereign bonds to strengthen the two state-run carriers, Prasad said, adding that the government will monetise telecoms assets worth 380 billion rupees.

Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.


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