Cabinet approves merger of BSNL & MTNL, revival package of ₹15,000 crore sanctioned

October 23: After much speculation amidst news in social media about closure of BSNL and MTNL, a ray of hope emerged on Wednesday as the Union Cabinet came up with a plan to revive BSNL and MTNL. The Cabinet has approved the revival package for the two ailing telcos— Bharat SancharNigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL), which includes Rs 15,000 crore infusion via sovereign bonds, a voluntary retirement scheme (VRS) and allocation of fourth-generation (4G) airwaves, besides the merger of the two loss-making state-run operators.

Telecom Minister Ravi Shankar Prasad while addressing newsmen said, “Neither BSNL-MTNL is being closed, nor is being disinvested, nor is being hived (off) to any third party. We want to make them competitive, bring in professionalism.” He further said that 4G spectrum will be allocated administratively at 2016 prices and the government will pay Rs 4,000 crore from the budget provision towards spectrum expense.

The two companies have debts of 400 billion rupees, Prasad said, with the government planning to raise 380 billion rupees by monitising their assets. HE further said that attractive VRS packages will come up which is voluntary, and not a forced one.  The minister said that Rs 15,000 crore worth of sovereign bonds which will be serviced by the two telcos would be given. Further, the Centre has also approved in-principle merger of the two. The minister said, “MTNL which operates in Delhi and Mumbai and is a listed company, according to him, would become a subsidiary of BSNL till the time both entities are completely merged.”