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DoT preparing request for BSNL, MTNL merger

26 Jun 2014

India’s Department of Telecommunications (DoT) has prepared a draft note seeking government approval for a merger of state-owned telcos Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL), the Hindustan Times reports a source at the DoT as saying. The proposal was put forward in light of the duo’s continuing financial difficulties, with the unnamed sources noting that the telcos’ unaudited results for the 2013-2014 fiscal year had seen the pair register losses of INR70.84 billion and INR19.08 billion (USD1.175 billion and USD316.58 million) respectively. TeleGeography’s GlobalComms Database notes that the government has embarked on a recovery programme for the ailing operators and has so far taken on the pension payment obligations of MTNL and refunded the pair for their unused broadband wireless access (BWA) spectrum. A number of other options are still on the table, however, including hiving off the tower and fibre assets of BSNL into a separate company. The merger of BSNL and MTNL, meanwhile, has been on the cards for more than a decade but has been continuously derailed by bureaucratic problems and protests from trade unions fearing that a merger would lead to job losses.

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