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Thursday, February 25, 2021

BSNL land to be sold to CBSE, merger with MTNL postponed

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A Group of Ministers (GoM) headed by Defense Minister Rajnath Singh has postponed the merger of BSNL and MTNL with public sector telecom companies (BSNL-MTNL Merger) for financial reasons. Government sources gave information about this.

The Group of Ministers has approved the sale of six thousand sqm land of BSNL (Bharat Sanchar Nigam Limited) in Noida to the Central Board of Secondary Education (CBSE) at the rate of Rs one lakh per sqm. The cabinet had approved a revival package of Rs 69,000 crore for loss-making telecom companies BSNL and MTNL (Mahanagar Telephone Nigam Limited), including the approval of the merger of the two companies.

According to an official source, “The Group of Ministers has postponed the merger of MTNL and BSNL mainly due to high debt on MTNL.”

As per the financial year ended 31 March 2020, the total liabilities of BSNL and MTNL were Rs 87,618 crore and Rs 30,242 crore respectively. The Department of Telecommunications has given license to BSNL to work in the telecom circles of Mumbai and Delhi, where MTNL already has operations.

Apart from loans, there are issues of salary structure between BSNL and MTNL employees and it is a challenge to bring them at par with each other. Even though GoM has postponed the merger of Telecom PSU, it has approved the allocation of 4G spectrum in Delhi and Mumbai to BSNL in place of MTNL.

Before this, the Department of Telecommunications had asked all Ministries, Departments, CPSEs and Central Autonomous Organizations to use the BSNL or MTNL network for internet, broadband, landline and leased line requirements. This order has been made to reduce the losses of government telecom companies, which are fast losing their customer base. BSNL had a loss of Rs 15,500 crore in 2019-20, while MTNL had a loss of Rs 3,694 crore during this period.

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