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.

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.

Route for Recovery?

Both the state-run telcos will have to upgrade to offering seamless 4G services across the circles they operate in. BSNL would have to keep in mind that 5G is around the corner as well. Thus the telco should look for building an infrastructure of networks which would allow it to shift to 5G as smoothly as possible.

Along with that, BSNL will also have to enhance its broadband offerings. The Bharat Fiber plans are not bad, but they fall behind the plans from JioFiber and Airtel Xstream Fiber in terms of benefits. This is simply because BSNL does not offer any over-the-top (OTT) benefits with its plans.

However, the state-run telco is covering ground as fast as possible. Its 4G tenders are out and recently; the telco started offering unlimited voice calling and 100 SMS/day benefit with all of its prepaid plans matching the offerings of other private telcos.

This post was last modified on January 25, 2021 12:13 pm

Tanay Singh

Tanay is someone with whom you can chill and talk about technology and life. A fitness enthusiast and cricketer, he loves to read and write.

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Tanay Singh