Government to consider BSNL/MTNL closure

16 Sep 2014

Government officials are to meet today to consider proposals to close struggling state-backed operators Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd (MTNL), the Economic Times writes. The officials are to review options for the ten biggest loss-making state-held entities, a list which also includes Air India, Hindustan Photofilms and Hindustan Fertilisers Corporation and was responsible for a combined net loss of INR245 billion (USD4.01 billion) in the 2012/2013 financial year. Whilst extreme measures such as closure are on the table, the officials are also to look into the potential to revive the ailing businesses, through capital infusion, joint ventures and management changes.

Plans to shut down any of the firms will face fierce opposition from trade unions, however. A spokesperson for Bharatiya Mazadoor Sangh (Indian Workers’ Union BMS) was quoted as saying that it will work with other unions to block the move: ‘We are coordinating with all central trade unions on the matter. We are fortunate that all trade unions are on the same page when it comes to these issues.’ Action from trade unions have long made the situation at BSNL worse, obstructing efforts to restructure the telco, fearing lay-offs.

India, Bharat Sanchar Nigam Limited (BSNL), Mahanagar Telephone Nigam Limited (MTNL)