The Centre has decided to merge state-owned telecom players BSNL and MTNL, approvinga a revival plan in its last-minute attempt to resuscitate the ailing firms, informed Union minister Ravi Shankar Prasad. "It can’t be done soon because MTNL is a listed company. It would take time," Prasad said, adding that the cabinet has decided to raise a sovereign bond of Rs 15,000 crore for revival of BSNL and MTNL, he said.
The government will put in Rs 29,937 crore for revival of the two state-owned telecom companies, Prasad added. It is learnt that the MTNL will be a subsidiary of the resultant entity. Adding that the Centre has no plans to shut down or disinvest state-owned telecom players BSNL and MTNL, Prasad assured that BSNL and MTNL will not be hired to third parties and a revival package for the bleeding companies is in the offing. As part of the merger proposal, assets worth Rs 38,000 crore will be monetised in four years.
The government has also decided to allocate 4G spectrum the telecom PSEs. He said that the government will make voluntary retirement scheme more attractive for BSNL, MTNL employees.
In September, the finance ministry had reportedly rejected a Rs 74,000-crore package proposed by the department of telecom (DoT) for the revival of BSNL and MTNL. The ministry had then asked the DoT to come up with another proposal to breathe life into the ailing state-run entities. The DoT's proposal worth Rs Rs 74,000-crore, included Rs 29,182 crore worth VRS payout for employees, Rs 10,993 crore worth retiral benefits payouts, Rs 20,410 crore for allotment of 4G spectrum and another Rs 13,202 crore in terms of capex required for roll-out of the 4G services. DoT's proposal also included financial projections, detailing a roadmap for BSNL to turn profitable by March 2023.
Amid conflicting reports that the finance ministry recommended shutting down of the state-owned entities, a top telecom department (DoT) official had indicated that the ministry was not in favour of closing down BSNL.
Reportedly, the Group of Ministers had approved a revival package for the loss-making public sector telecom firms in mid-July. Finance Minister Nirmala Sitharaman, telecom minister Ravi Shankar Prasad were part of the GoM that approved the plan. However, further procedures were stalled after finance ministry officials later raised over 80 objections to the proposal firmed up by the telecom ministry.
Meanwhile, on Monday, BSNL Chairman and Managing Director P.K. Purwar had assured that the salary of all employees will be paid before Diwali on October 23 and 24.