State-run telcos BSNL and MTNL are reeling under losses right now and there have been merger talks going on for a while now. However, government officials denied the merger of BSNL and MTNL in the past even though reports suggested that merger talks are going on internally. According to a new report, the government is planning to merge both the telcos under the upcoming revival package. For the unaware, the government is preparing a revival package for both MTNL and BSNL and the report coming from Business Line states that the package is ready and it has received Telecom Ministry approval as well. Also, post the merger, MTNL will be converted as the subsidiary of BSNL, which is an interesting aspect to consider.
BSNL and MTNL Merger to Happen Soon as Government Finalises Revival Package
As part of the revival package which has been approved by Telecom Ministry, state-run telcos Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) will be merged finally. However, the government is currently in the process of sorting major issues like human resources within both the companies. BSNL and MTNL have a lot of employees
“A joint committee will be put in place to oversee the entire process over the next 18 months, according to a memo approved by Telecom Minister Ravi Shankar Prasad,” according to the report by Business Line.
For years now, there have been a lot of talks regarding the merger of BSNL and MTNL, but several times, ex- Telecom Minister Manoj Sinha rubbished the rumours himself that there are no such plans. BSNL’s current state is not looking promising at all as the telco is struggling to pay salaries to the employees as well. The same goes for MTNL as well.
BSNL has been adding customers on a good note, but that’s not enough for the telco to survive in the competitive Indian telecom market. The government is yet to officially declare the revival package for BSNL and MTNL, post which we will get to know the future of both the telcos.
Lack of 4G Services Hurting Both BSNL and MTNL
One of the reasons why BSNL and MTNL are struggling against private telcos is because of the lack of 4G services. Both BSNL and MTNL does not offer 4G network services to the customers and they’re limited to just 2G and 3G. Although BSNL is testing 4G services in several parts of the country, a commercial launch is awaited. It’s expected that the revival package from the government will have a solution for this as well.
Other telcos Reliance Jio, Bharti Airtel and Vodafone Idea, are aggressively investing in improving 4G network coverage, but that’s not the case with BSNL and MTNL as they don’t have any 4G spectrum right now. BSNL has some of the best tariff plans in the industry and offers like Additional 2.2GB daily data are attracting a lot of new customers, but the lack of proper network speeds is keeping them away from joining BSNL.