BSNL/MTNL merger still on ice; BSNL to roll out 112,000 4G sites

7 Apr 2022

The Indian government has deferred the planned merger of state-owned providers Mahanagar Telephone Nigam Limited (MTNL) and Bharat Sanchar Nigam Limited (BSNL), the Economic Times writes, citing Minister of State for Communications Devusinh Chauhan. In a response to parliament, the minister noted that the government had approved the revival plan for BSNL and MTNL in October 2019, which included the in-principle approval for the merger of MTNL and BSNL. However, the minister noted: ‘due to financial reasons including the high debt of MTNL, the merger of MTNL with BSNL is deferred’. As noted by TeleGeography’s GlobalComms Database, in March 2021 the government had announced the deferral of the merger – also citing ‘financial reasons’ – for an unspecified period but acknowledged the cooperation and service integration between the two companies had already started, with BSNL having taken over the running of MTNL’s mobile networks in Mumbai and Delhi in January 2021. It was not clear from the most recent statement on the matter whether the minister was postponing the tie-up further or reiterating and clarifying the government’s position. The explanation had been prompted by a letter from the BSNL Employee Union (BSNLEU) which had argued against the merger on the basis that MTNL’s debt level would inflict ‘irreparable damage’ on BSNL’s financial recovery. The BSNLEU instead urged the government to take on MTNL’s debt pile of INR260 billion (USD3.44 billion) and provide financial assistance for the rehabilitation of the telco’s infrastructure. Regarding the government’s plans to reduce MTNL’s debt through the monetisation of its land and building assets, the minister noted that the sale of six such assets had been approved (valued at around INR51.6 billion) and consultants had been appointed.

In a related development, meanwhile, BSNL has announced plans to roll out around 112,000 4G towers across the country. Telecom Minister Ashwini Vaishnaw told parliament that the operator was in the process of ordering 6,000 sites and would follow shortly with 6,000 more and third order of 100,000. No timeframe was stipulated for the deployment, however, and the minister added that BSNL was developing 5G technology in parallel to its 4G rollout.

India, Bharat Sanchar Nigam Limited (BSNL), Department of Telecommunications (DoT), Mahanagar Telephone Nigam Limited (MTNL)