Proposal To Merge BSNL, MTNL Deferred Due To Financial Reasons, Says Govt

BSNL intends to install about 1.12 lakh towers across the country ahead of the indigenous 4G telecom network roll-out throughout India, said Telecom Minister Ashwini Vaishnaw

PK Purwar, who heads MTNL, has submitted before a Parliamentary panel that the DoT should consider carving out of over Rs 26,500 crore debt of MTNL and its assets under a special purpose vehicle. Image: Getty

New Delhi: The government has deferred the merger of state-run telecom firms BSNL and MTNL due to financial reasons, Parliament was informed on Wednesday.

Minister of State for Communications Devusinh Chauhan in a written reply to the Rajya Sabha said that a proposal for the merger of Bharat Broadband Network Limited (BBNL) and Bharat Sanchar Nigam Limited (BSNL) is under examination.

"The government has approved the revival plan of Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) on October 23, 2019, which inter-alia includes in-principle approval for the merger of MTNL and BSNL. Due to financial reasons, including high debt of MTNL, the merger of MTNL with BSNL is deferred," Chauhan said.

BSNL Chairman and Managing Director PK Purwar, who also heads MTNL, has submitted before a Parliamentary panel that the Department of Telecom should consider carving out of over Rs 26,500 crore debt of MTNL and its assets under a special purpose vehicle.

He suggested that thereafter operations of MTNL should be merged with BSNL.

Meanwhile, BSNL intends to install about 1.12 lakh towers across the country ahead of the indigenous 4G telecom network roll-out throughout India. Telecom Minister Ashwini Vaishnaw informed the Lok Sabha about the development on Wednesday.

MTNL was earlier expected to turn profitable by 2020-21 and BSNL by 2023-24 after both PSUs were jointly given a relief package of around Rs 70,000 crore in 2019.

"With Rs 26,000 crore debt, even if God comes to earth and tries to address its problems, the company cannot be revived. It is a fact of life; we have to accept it," MTNL CMD told the panel.