NEW DELHI: The government has deferred the merger of state-run telecom companies Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) due to financial reasons including the high debt of the latter, Minister of State (MoS) for Communications Devusinh Chauhan told the Lok Sabha Wednesday.
“Government has approved the revival plan of Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) on 23.10.2019 which inter-alia includes in-principle approval for 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 written reply to a question by BJP MP Nitesh Ganga Deb.
On March 23, the BSNL Employee Union (BSNLEU) wrote to PM Narendra Modi saying that the proposed merger between MTNL and BSNL would do “irreparable damage“ to the Cabinet-approved revival plan for the latter.
Further, the group “fervently appealed to drop the proposal to merge MTNL with BSNL” and suggested that the government should take over MTNL’s debt amounting to Rs 26,000 crore, and should provide sufficient financial assistance to BSNL for the rehabilitation of MTNL network.
In January last year, BSNL took over MTNL’s mobile networks in two metropolitans – Delhi and Mumbai.
The Centre has planned to create synergies between the two loss-making entities, and further merge their operations making a single entity. MTNL is a listed firm, and has a wage disparity with BSNL employees.
Recently, the Parliamentary Standing Committee on Communications and
Information Technology has also suggested the telecom department to
carve out MTNL’s debt and assets worth over Rs 26,500 crore into a
special purpose vehicle (SPV) and recommended merging telco's operations
with that of BSNL.
In October 2019, the Cabinet approved the rescue plan for the state-owned BSNL and MTNL worth Rs 70,000-crore that included a voluntary retirement scheme (VRS), monetisation of assets and allocation of fourth generation or 4G airwaves, and a merger between the two companies.
Chauhan in his reply mentioned that for the monetisation of land/building assets of MTNL, the Department of Investment and Public Asset Management (DIPAM) has approved monetisation of six assets of MTN valued at around Rs 5,158 crores in phase-1 for which International Property Consultants (IPCs) have been appointed.
“Out of these properties, 2 properties (reserved price of Rs 290 crores) have been taken for e-auction,” the minister said.
In October 2019, the Cabinet approved the rescue plan for the state-owned BSNL and MTNL worth Rs 70,000-crore that included a voluntary retirement scheme (VRS), monetisation of assets and allocation of fourth generation or 4G airwaves, and a merger between the two companies.
Chauhan in his reply mentioned that for the monetisation of land/building assets of MTNL, the Department of Investment and Public Asset Management (DIPAM) has approved monetisation of six assets of MTN valued at around Rs 5,158 crores in phase-1 for which International Property Consultants (IPCs) have been appointed.
“Out of these properties, 2 properties (reserved price of Rs 290 crores) have been taken for e-auction,” the minister said.
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