Cabinet approves BSNL-MTNL merger, employees to get VRS package offer

The Union
Cabinet, headed by Prime Minister Narendra Modi, on Wednesday approved the
merger of state-owned telecom companies – Bharat Sanchar Nigam Limited (BSNL)
and Mahanagar Telephone Nigam Limited (MTNL). The Cabinet also announced
revival plan for MTNL and BSNL.

Union
Cabinet, Telecom Minister Ravi Shankar Prasad said that Rs 29,937 crore will be
given by the Centre in order to revive the two ailing state-owned telecom
companies. The Cabinet also approved the proposal to allocate 4G spectrum to
Public Sector Enterprises.

Prasad also told the media that a sovereign bond of Rs 15,000 crore will be raised by the Centre for the revival of MTNL and BSNL. The Union Minister also said that a voluntary retirement scheme will be offered to the employees of these companies to reduce the operational cost of both firms.

Prasad’s
office also posted a tweet saying the merger would be “operationalise
gradually”. “BSNL and MTNL are strategic assets of India. They cater
to the needs of people during disaster. They provide important communication
services to government,” it stated.

It is to be
noted that BSNL has a strength of 1.76 lakh employees and it posted a net loss
of ₹13,804
crore in fiscal 2018-19. BSNL and MTNL witnessed 2.15 lakh and 6,701
subscribers exiting their networks in August respectively.

According to
latest TRAI data, private telecom firms held 89.78% market share of the
wireless subscribers as on August 31, while the market share of BSNL and MTNL
is only 10.22%