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Govt may shelve BSNL-MTNL merger as it is not feasible: Report

Union Cabinet will take a final call on the issue soon

The merger was announced to revive the ailing state-run telcos facing intense competition from private players

A six-member group of ministers (GoM) last week recommended to hold the merger of Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) as it would neither be beneficial nor feasible, reported Business Standard on Monday. The Union Cabinet, however, will take a final call on the issue soon, it added.

The merger was announced to revive the ailing state-run telcos facing intense competition from private players like Reliance Jio and Bharti Airtel. The Department of Telecommunications (DoT) is also in favour of scrapping the merger, the report said citing government officials.

Reportedly, Defence Minister Rajnath Singh had chaired the meeting of the six-member GoM comprising Telecom Minister Ravi Shankar Prasad, Finance Minister Nirmala Sitharaman, Commerce Minister Piyush Goyal, Home Minister Amit Shah, Petroleum and Natural Gas Minister Dharmendra Pradhan, last week.

According to the report, the GoM decided against combining the two entities in order to prevent further erosion of BSNL's value.

The plan to merge the two telcos was announced in October, 2019 when the cabinet had announced a four-step revival process worth Rs 68,751 crore that included the allocation of 4G airwaves, voluntary retirement scheme (VRS), assets monetisation, and a merger plan between the two telcos which was expected to finalise in 24 months.

BSNL and MTNL both hold a telecom market share of close to 10.75 per cent.