MTNL, BSNL likely to merge

New Delhi: The government is once again looking at proposal to merge two state-owned telecom operators — BSNL and MTNL.

Top officials in the telecom department have recently discussed the possibility of merging the two telecom operators, which are making losses.

Among various possibilities being discussed is BSNL picking up mobile operations of MTNL in Gurgaon, Noida and Faridabad, where it is already offering landline and broadband services. Other possibility being explored is  BSNL’s acquiring MTNL’s  mobile operations in Delhi and Mumbai.

Mahanagar Telephone Nigam Limited (MTNL) has operations in Delhi and Mumbai. Bharat Sanchar Nigam Limited (BSNL) has operations in the entire country, except  Delhi and Mumbai. HR issues like staff salary and union opposition is among the challenges for the merger of the two firms.

BSNL and MTNL have a market share of about nine per cent of the total wireless subscriber base of 1.12 billion.

The idea of merging the two firms was first mooted years ago by the then telecom minister Pramod Majahan and has been deliberated upon a few times since then. The idea was also discussed during UPA-II regime.

The merger will be a positive for MTNL which has been making losses for many years now. The total debt of MTNL reached Rs 19,418.23 crore at the end of December 31, 2016, from Rs 11,542.3 crore in 2012-13, according to official data. In 2015-16, MTNL reported total annual revenue of Rs 3,197.41 crore and net loss of Rs 2,005.72 crore.

The losses of BSNL have narrowed, however, to Rs 4,890 crore for the nine month period of the current fiscal, from Rs 6,121 crore in the year-ago period. It posted 5.8 per cent increase in income from services at Rs 19,379.6 crore during the period under review.