BSNL-MTNL merger on the cards?

The government is likely to merge PSU telcos BSNL and MTNL with organizational restructuring as it plans to revive the two firms.

"The merger of BSNL and MTNL is definitely on the table for the revival of these firms. We are working on it," a source in Department of Telecom (DoT) told a publication.

However, there is no appropriate timeline for the merger.

Just recently, telecom minister Ravi Shankar Prasad had said that the government is committed to the revival of BSNL. He cited inadequate investment in infrastructure expansion leading to delay in expansion of mobile network and paying market rate (of Rs 18,500.38 crore) for both 3G and broadband wireless access (BWA) spectrum as the reasons for the downfall of the company.

The PSU firm slipped into losses due to lack of investment and the rising competition from its peers.

Earlier, the minister had said that the government will invest Rs 39,458 crore in loss-making PSU telcos BSNL and MTNL.

"The financially-stressed public sector telecom companies that together have a debt of Rs 21,208 crore as of June-end, face declining revenue due to loss of market share, increasing expenditure and inability to invest in network expansion," the telecom minister had said.

BSNL has debts to the tune of Rs 3,335 crore in March 2012, which rose to Rs 6,448 crore in June 2014, while MTNL's debt has gone up to Rs 14,760 crore end of last month from Rs 9,648 crore in March 2012.