Revival plan of BSNL MTNL

BSNL-MTNL Merged: Cabinet approves the revival plan; 4G services get a boost

In anticipation of getting two government-owned telecommunication entities profitable, the Union Cabinet yesterday laid out its revival package of merging BSNL and MTNL.

With respect to this decision, Minister of State for HRD, Telecommunication, Electronics & IT, Government of India, Sanjay Dhotre had commented on Twitter that the Modi government meets all the expectations that it creates. What is promised is surely delivered!
The merger will be done by administrative allotment of spectrum for 4G services, debt restructuring by raising of bonds with a sovereign guarantee, reducing employee costs, monetization of assets and in-principle approval of the merger of BSNL & MTNL.

The following was approved by the cabinet:-

  1. Administrative allotment of spectrum for 4G services to BSNL and MTNL so as to enable these PSUs to provide broadband and other data services. The said Spectrum will be funded by the Government of India by capital infusion in these PSUs at a value of Rs 20,140 Cr in addition; the GST amount of Rs 3,674 Cr to this spectrum value will also be borne by the Government of India through Budgetary resources. By using this spectrum allotment, BSNL and MTNL will be able to deliver 4G services, compete in the market and provide high-speed data using their vast network including in rural areas.
  1. BSNL and MTNL will also raise long-term bonds of Rs 15,000 Cr for which sovereign guarantee will be provided by the Government of India (GoI). With the said resources, BSNL and MTNL will restructure their existing debt and also partly meet CAPEX, OPEX and other requirements.
  1. BSNL and MTNL will also offer Voluntary Retirement to their employees, aged 50 years and above through attractive Voluntary Retirement Scheme (VRS), the cost of which will be borne by the Government of India through budgetary support. The ex-gratia component of VRS will require Rs. 17,169 Cr in addition, GoI will be meeting the cost towards Pension, Gratuity, and Commutation. Details of the scheme will be finalized by BSNL/MTNL.
  1. BSNL and MTNL will monetize their assets so as to raise resources for retiring debt, servicing of bonds, network upgradation, expansion and meeting the operational fund requirements.
  1. In-principle merger of BSNL and MTNL

It is expected that with the implementation of the said revival plan, BSNL and MTNL will be able to provide reliable and quality services through its robust telecommunication network throughout the country including rural and remote areas.

 

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