MTNL Should Merge With BSNL Based on a Special Purpose Vehicle: MTNL Chairman

The government led debt-ridden telecom operator, Mahanagar Telephone Nigam Limited (MTNL), which operates in Delhi and Mumbai circles has urged the government to package a Special Purpose Vehicle (SPV) so that the Rs 20,000 crore debts and assets including 1,100 towers, lands and buildings are deleveraged to correct the financials of the company. MTNL has also talked to the government about a merger with BSNL so that the telco will be able to expand operations across India on the basis of network utilisation.

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MTNL Chairman Asks for SPV from Government

MTNL chairman and MD, Praveen Kumar Purwar told said in a statement, “In today’s below-cost competition, consolidation of BSNL and MTNL as one entity is the need of the hour and the only way to survive. Fragmented operations can only lead to their extinction.” He said that the government would need to work for MTNL’s sustenance and once the telecom operator’s financials are strong enough then a merger will BSNL can be ideated upon.

He further added to his statement, “We don’t want to create a burden on BSNL. But it calls for addressing the Rs 20,000 crore debt and high employee cost by the government. MTNL has 23,000 employees. We want the government to address these issues by transferring them to another structure.”

The chairman remarked that in the long term, MTNL is a viable entity and can survive with a long run horizon, however, it will need to work in synergy with BSNL for that to happen. He also added that sub-optimal scale of operations is not something which will make the entity sustainable.