It is no secret that Bharat Sanchar Nigam Limited (BSNL) has been optimising and handling the mobile network operations of MTNL (Mahanagar Telephone Nigam Limited) in Mumbai and Delhi. At the moment, the Indian government is restructuring Rs 30,000 crore worth of debt for MTNL. After the debt restructuring, BSNL will take over the entire operations of MTNL. So while no official call has been taken to shut down MTNL yet, it is confirmed through an ET report that BSNL will take over MTNL operations. As for the employees of MTNL, the government is considering whether the 3000 MTNL employees should be given a voluntary retirement scheme (VRS) or whether they should be transferred to BSNL.
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Both BSNL and MTNL have been struggling to operate their business in a profit. The state-run telecom companies have been losing customers to the private telecom firms. Since the debt of both companies was too high, a merger wouldn't make sense as it would only add up the problems for both companies. Thus, the government decided that the debt of both firms should be restructured and they should be provided sovereign guarantees so that they can raise long-term loans.
MTNL, operating in just Mumbai and Delhi, will unlikely be able to sustain. Thus, since BSNL is operating PAN-India, its operations will also be shifted for BSNL to handle. It is unclear when MTNL will shut down completely, but one thing is clear, this is not going to be a merger. BSNL will be the one responsible for handling all the existing MTNL customers in the two regions.
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It will be interesting to see how this exactly happens as MTNL is a listed telecom entity. Thus any decision taken by the government will affect not just the customers or the employees of the state-run telecom operator, but also its investors.
