Kumar Mangalam Birla had earlier said that he is willing to give his promoter stake in Vodafone Idea to the government. But now, it looks like that won’t happen since government can’t imagine a world where both Vodafone Idea and BSNL are merged. This is because of the losses and debt that Vodafone Idea has mounted on its head. In addition to this, it isn’t like the government is running a very successful telecom business and it would be looking to acquire more in the sector. Even the government run telcos including BSNL and MTNL are both unsuccessful and are only surviving because of the bailouts from the government.
BSNL and Vodafone Idea Merger Unthinkable
As senior officer told TOI that the merger between the companies is “unthinkable” as it would seem like the government is going after “privatisation of profits” and “nationalisation of losses”, and this actually makes sense.
To Birla, selling his stake of the company to the government seemed like a viable option but this isn’t correct for the government. Even BSNL and MTNL haven’t been running smoothly despite being handed out a revival package worth Rs 69,000 crore in 2019.
As per the publication’s report, an officer aware of the developments said that merging the telcos would lead to a “financial mess”. This makes sense because the merger won’t serve any purpose to the government or to the subscribers. The government isn’t the best in running a telecom business and Vi might get into more trouble after being acquired by the state.
The better option for the government would be to keep its resources and energy focused on the well being of BSNL and MTNL so that both these telcos can reach a better position than they are in right now. Acquiring Vodafone Idea would result in a headache and mismanagement for the government and thus, for the time being, BSNL should be the focus for the government.