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The survival plan: Telecom Ministry frames plan to merge MTNL and BSNL

BSNL and MTNL merger will be jointly monitored by Department of Telecommunications (DoT) and Department of Investment and Public Asset Management (DIPAM)

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VoicenData Bureau
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MTNL and BSNL merger

Is it the right time to merge MTNL with BSNL? Situations have led to a few quick decisions this week that seem to make it the right time for the merger. After several months of discussions among senior officers and Ministers of the telecommunications department, the Telecom Ministry has given its consent for the merger of Mahanagar Telephone Nigam Ltd (MTNL) with Bharat Sanchar Nigam Ltd (BSNL). The Ministry is in the view that this move can be the best revival plan for the loss-making PSUs.

It is in talks that following the merger, MTNL would be converted into a subsidiary of BSNL. The merger would be carried out after resolving issues such as human resources. However, it is estimated that the procedures for completing this merger will take a two-year period.

Telecom Minister Ravi Shankar Prasad, in a memo, has said that a joint committee would be set up to monitor the whole process over the next 18 months. The Minister had given his consent to the plan around July 26th. The plan was further circulated to other ministries for their comments. The cabinet, however, will make the final decision on this.

In the meantime, the DoT is preparing the survival plan that entails components like voluntary retirement scheme, asset monetization, and allocation of 4G spectrum.  The approved plan also comprised a Rs 14,155 crore capital infusion to BSNL by the government to acquire 4G spectrum.
The merger will be jointly monitored by BSNL, Department of Telecommunications (DoT) and Department of Investment and Public Asset Management (DIPAM), said the report.

A Special Purpose Vehicle (SPV) will also be constituted for taking the decisions related to land monetization. The BSNL's loan to the tune of Rs 23,000 crore and an equivalent land parcel will be moved to this SPV.

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