BSNL, MTNL face setback as Centre delays merger due to financial reasons

 Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) faces setback as the government has delayed the merger of these two state-owned telecom services providers due to financial reasons.

In a written reply to the Rajya Sabha, the Minister of State for Communications Devusinh Chauhan on Wednesday stated that the proposal for the merger of BSNL and MTNL is under examination.

"Government has approved the revival plan of BSNL and MTNL on October 23, 2019, which inter-alia includes in-principle approval for the merger of MTNL and BSNL. Due to financial reasons including high debt of MTNL, the merger of MTNL with BSNL is deferred," Chauhan said in a PTI report.

   BSNL Chairman and managing director PK Purwar, has submitted before a Parliamentary panel asking the Telecom Department to consider carving out more than ₹26,500 crore debt of MTNL and its assets under a special purpose vehicle.

The BSNL Chairman and MD also heads MTNL. 

With ₹26,000 crore debt in MTNL, Purwar said in the report, "even if God comes to earth and tries to address its problems, the company cannot be revived. It is a fact of life; we have to accept it."

The BSNL chief also suggested that thereafter operations of MTNL should be merged with BSNL.

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