The merger process of two state-owned service providers, Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL), has started with BSNL taking over the latter's network in Mumbai and Delhi.
BSNL will start offering landline services in Mumbai and National Capital Region (NCR) from March this year. Initially, it was supposed to begin offering landline services in these two cities from January 1, but internal issues delayed this.
BSNL provides connectivity services across the country except for Delhi and Mumbai, which were served by MTNL. Post merger, BSNL will run MTNL's mobile and landline service as its “outsourced agency.”
The operator would be managing MTNL's landline network in the two major cities. The company was granted a new Unified License in February last year valid for 20 years to operate across the country, including Delhi and Mumbai. BSNL, which had issued a 4G tender some time back, hopes to debut 4G services in these two cities.
Better together
The two firms have been making losses for several years now. They turned EBIDTA positive only recently. The merger, announced in October 2019, of the two companies, is part of the strategy to revive the two companies. The merged entity will be more agile and have better cost dynamics to survive in the hypercompetitive environment.
With a pan-India presence, BSNL will be better placed to address the requirements of the enterprises in the metros that typically operate from several locations. BSNL and MTNL were unable to withstand the competitive intensity of the private players, especially so after the launch of Reliance Jio.
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