BSNL, MTNL revival plan: DoT plans new holding company for PSUs

By November 9th, 2015 AT 10:28 AM

State-run telecom companies Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) could become subsidiaries of a new holding company, which is now being considered by the department of telecommunications (DoT), Business Standard reported.

The report said that the move, recommended by IIM-Bangalore in a report on measures for reviving the firms, is expected to revive both the ailing telcos by synergising their operations.

“The first option of a holding company, with two public sector undertankings (PSUs) as subsidiaries, looks most feasible, as of now,” an official quoted by the publication.

The telecom department also thinks about one more option which is delisting MTNL and then merging it with BSNL, and MTNL becoming a subsidiary of BSNL, the report said, adding the final decision is likely to be taken in next few months, which will go for a Cabinet approval subsequently. Moreover, the authorities are also charting out a plan of MTNL to share spectrum with BSNL to avoid black spots in Delhi-NCR region, the report said.

BSNL ended with revenue of Rs 28,500 crore as of March 2015. BSNL recorded about Rs 7,600 crore loss for FY15. MTNL also posted Rs 745 crore net loss for the June quarter this year.

In a recent interaction with media, BSNL Chairman and Managing Director Anupam Shrivastava said that the PSU will be back in profits by 2018-19 with growing data demand, and lesser salary outgo impact. He also said that the telco’s capex and collaboration (sharing) initiatives are going in the right direction.

BSNL is now aiming for revenue between Rs 30,000 crore and Rs 32,000 crore in 2015-16, with losses at less than Rs 6,000 crore.

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