The plan to revive the state-owned telecom companies - Bharat Sanchar Nigam (BSNL) and Mahanagar Telephone Nigam (MTNL) - by merging the two entities is set to be shelved after almost two decades of deliberations on the matter.
A six-member group of ministers (GoM), mandated to take a call on the issue, is learnt to have recommended last week that a merger would neither be beneficial nor feasible, thereby closing a long-drawn chapter in the telecom sector. The Union Cabinet will meet soon to formally decide against such a merger.
As per the sources, the Department of Telecommunications (DoT) is also in favor of scrapping the merger. The above mentioned GoM comprises Finance Minister Nirmala Sitharaman, Telecom Minister Ravi Shankar Prasad, Commerce Minister Piyush Goyal, Home Minister Amit Shah, Petroleum and Natural Gas Minister Dharmendra Pradhan.
The GoM decided to vote against combining the two entities in order to prevent further erosion of BSNL’s value. Prior to this, the Union Cabinet has approved a 4-way revival plan for BSNL to help them to survive, and operate during October 2019.
The said package included Rs 15,000 crore which will be raised through sovereign bonds, and monetization of real estate assets with BSNL, to the tune of Rs 38,000 crore.
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