BSNL, MTNL merger only way to give them fighting chance: Panel

The merger in order to give them a “fighting chance” at survival -- a merged company is expected to give it the clout necessary to take on the might of private sector.

Published: 23rd December 2017 08:33 AM  |   Last Updated: 23rd December 2017 08:33 AM   |  A+A-

logo of Bharat Sanchar Nigam Ltd (BSNL) painted on a wall outside its office in Kolkata. (Photo | Reuters)

By Express News Service

NEW DELHI: A parliamentary panel looking into state-run telecom firms, currently struggling with competition from the private sector and losses, has recommended that BSNL and MTNL be merged in order to give them a “fighting chance” at survival -- a merged company is expected to give it the clout necessary to take on the might of private sector. The 43rd report of the Committee on Petitions tabled in the Lok Sabha, the panel pointed out that “for the long-term survival and success of MTNL and BSNL, their merger would only be a viable proposition - in view of the fact that their merger would give both the entities a chance for competition against the emerging consolidated private sector players”.

The report also noted that the Department of Telecom had already outlined two different options to improve the prospects of Mahanagar Telephone Nigam (MTNL) and Bharat Sanchar Nigam Ltd (BSNL). One of the two options entailed MTNL focusing on turnaround with support from the government and shareholders and seeking opportunities “to sell and divest select business assets”. 

The other would see the government seeking opportunities for merger of MTNL with BSNL to become a pan-India integrated telecom operator offering wired and wireless telephony services.This would allow them to optimise resources and increase revenue through synergised operations. 

The committee pointed out in its report that it had been informed by the communications ministry that a revival plan prepared by consultant Deloitte has been considered and recommended by the MTNL Board in their meeting in March 2017.Then sent to the DoT, it is currently under process. “Now that the revival plan has been considered by MTNL board and is under consideration of the Department of Telecom, the committee desire that the ministry should explore ways to implement the revival plan without further loss of precious time,” the committee said.

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