BSNL and MTNL Merger Won’t be Beneficial or Feasible

Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) might not merge anytime soon. In a recent meeting, a six-member Group of Ministers (GoM) had met and concluded that the merger of BSNL and MTNL isn’t the right way to go. It wouldn’t be beneficial for any party. As per a Business Standard report, a final call on the matter is yet to be taken by the Union Cabinet. It is worth noting that the government runs both the telcos, and neither of them has a positive cash-flow — more details on the story ahead.

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BSNL and MTNL Merger Won’t Revive the Telcos

The Union Cabinet on October 2019 had revealed a four-step revival plan for the telcos amounting to Rs 68,751 crore. This revival plan included the merger of both the telcos and the mention of voluntary retirement scheme (VRS), assets monetisation, and allocation of 4G airwaves in the next two years.

However, the possibility of this happening now seems a little weak. The six-member GoM expressed that the merger won’t be benefitting anyone or even feasible. What’s worth noting is that BSNL has already started operating MTNL’s mobile network in the Mumbai and Delhi circles. It started operating MTNL’s mobile network from January 1, 2021, by acting as an outsourced agency.

BSNL can even offer mobile services in the Mumbai and Delhi circles as the department granted the telco a unified license on December 16, 2020. Thus, the telco is expected to provide 4G services in the Delhi and Mumbai circles soon.