Multiple Fronts Rooting for BSNL and Vodafone Idea Merger

There have been talks of a synergy between BSNL and Vodafone Idea for pan India voice service. It’s worth noting that BSNL is one telco that lacks 4G network and if BSNL were to sign a roaming pact with Vodafone Idea Ltd and a synergy were to come in between the two telcos, then BSNL could have its much needed 4G service, where Vodafone Idea can stay afloat in the industry.

Highlights

  • BSNL is receiving sovereign guarantee of Rs 8,500 crore from the govt
  • BSNL and VIL might synergise to boost subscribers and finances
  • Vodafone Idea has AGR dues worth Rs 1.5 lakh crore

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BSNL
Bharat Sanchar Nigam Limited (BSNL) is the only public telecom company in the ruthless industry of telecom in India. However, similar to Vodafone Idea, BSNL has its own story of poor financials. But now it seems that the support of BSNL is something that can save Vodafone Idea and its network. There have been talks of synergy between BSNL and Vodafone Idea for pan India voice service. It’s worth noting that BSNL is one telco that lacks 4G network and if BSNL were to sign a roaming pact with Vodafone Idea Ltd and synergy were to come in between the two telcos, then BSNL could have its much needed 4G service, where Vodafone Idea can stay afloat in the industry.

Many Supporting Synergy Between BSNL and VIL

Aftab Ahmed Khan, president, Sanchar Nigam Executives Association (SNEA) told ETTelecom that synergy is a good idea between the two telecom companies and this would allow the subscribers of BSNL to latch on to high-speed services of 4G. Notably, SNEA represents 13,000 executives from BSNL. The public telecom company is yet to receive airwaves from the centre for the deployment of 4G services and is also managing the airwaves of MTNL which used to be functioning in metropolitan areas of Mumbai and Delhi. BSNL has dues of Rs 22,000 crore, whereas the govt is only ready to give a sovereign guarantee of Rs 8,500 crore. Vodafone Idea has AGR dues worth Rs 1.5 lakh crore.

Vodafone Idea and BSNL Can Merge: Deutsche Bank

As for Vodafone Idea, the billionaire Kumar Mangalam Birla whose Aditya Birla Group owns a 27.66% stake in Vodafone Idea Ltd wrote to the Cabinet Secy, saying that he is looking to dump his stake in the company either to a public entity or a private investor since he is unable to determine the fate of the telco. The German-based bank, Deutsche Bank, has also said that BSNL and VIL both can be said if VIL’s debt is converted into equity and the telco is merged with BSNL and recapitalised. Ravi Shil Verma, president, AIGETOA  All India Graduate Engineers & Telecom Officers Association (AIGETOA) also said that the two companies can come together to capture a significant market share.

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Junior Editor

Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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