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Cabinet nod to BSNL-MTNL merger, VRS, 4G spectrum allocation

  •   Wed, Oct 23 2019 05:56:25 PM

New Delhi, Oct 23 (IANS): The Union Cabinet on Wednesday approved the much-awaited 4G spectrum allocation to ailing telecom PSUS -- BSNL and MTNL -- and gave in-principle approval to their merger while allowing them to raise sovereign bonds of Rs 15,000 crore for their revival.

The allocation of 4G spectrum to them would be done at 2016 prices and administratively.

"BSNL & MTNL will raise a sovereign bond of Rs 15,000 crore for their revival and assets of both the PSUs worth Rs 38,000 crore will be monetized. The cabinet also approved an attractive VRS package for the employees which has been slightly tweaked from the original Gujarat model. Government will provide 4G spectrum on an administrative allocation basis. The cabinet has also given in-principle nod to the merger of BSNL and MTNL and till modalities are in place, MTNL will be a subsidiary of BSNL," Telecom Minister Ravi Shankar Prasad said at the briefing after the cabinet meeting.

Cut-throat competition and entry of Jio on free voice and cheap data prices led to consolidation in the Indian telecom sector with many small telcos shutting shop under losses and currently only Jio, and Airtel are left along with the merged entity of Vodafone and Idea.

MTNL is listed but has its net worth already eroded. BSNL is unlisted. MTNL operates in Delhi and Mumbai while BSNL operates in rest of India and mostly in the hinterlands.

The PSUs' merger have been discussed many times earlier in the last 10 years but due to HR and listing issues, it never could be taken up. BSNL has an estimated loss of Rs 14,000 crore in 2019 fiscal and MTNL has been in deep losses. BSNL is a 3G mobile player with sporadic 4G services on hotspots and on old 1900/2100 spectrum bands. It has 12 crore mobile subscribers and a 11 per cent market share.

 

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Comment on this article

  • juliana, udupi

    Thu, Oct 24 2019

    How and why anybody give service at no expense need to ponder. Government need to nurture the combined PSU for overall development of the country.

    DisAgree [1] Agree Reply Report Abuse

  • Jossey Saldanha, Atlanta

    Wed, Oct 23 2019

    Looks like their Last Diwali ...

    DisAgree [2] Agree [8] Reply Report Abuse

  • SmR, Karkala

    Wed, Oct 23 2019

    It’s a gloomy Diwali this year for millions of public sector employees in India. Even with Diwali around the corner, Staff of BSNL and MTNL have it the worst. Saddled with a massive debt of Rs13,000 crore ($1.81 billion), BSNL has been struggling to pay its staff since March, when it first defaulted on salary payments to its roughly 180,000 employees. In the case of BSNL, this is the third consecutive month when salaries have been delayed. The employees got their August salary after it was delayed for almost 20 days. But, the delay for the September salary has been the longest. Earlier this year, the February salary was paid much later in March.
    The government has already reduced the age of retirement from 60 to 58 and it will come into effect from March 1, 2020. Interestingly the PM Modi's government's revival plan might imply that the government wants to ensure that at least 70,000 employees take VRS.
    For instance, national carrier Air India and BSNL and MTNL are bleeding. On the other hand, state-owned lenders are burdened by non-performing assets (NPAs), which prompted the Modi government to announce a series of mergers, after which the banks have become overstaffed.
    Modi government is desperate for cash. They have already worked out plans to sell the family silver by disinvesting the profit-making ‘navratna’, Bharat Petroleum. This money, along with the funds raised by floating sovereign bonds worth Rs 15,000 crore, will be used to retire some of the debt.
    Ultimately, what is likely is that these strategic assets might be demerged into a separate subsidiary, which will remain under government control, even if BSNL and MTNL are sold one day.
    1. All this has left the 11.3 million central public sector employees tense. BSNL, HAL, Air India has The Modi Govt Pushed PSUs Into More Trouble?
    2. Modi Govt & BSNL-MTNL: Is ‘Revival’ Package a Prelude to a Sale?

    BSNL, MTNL, HAL, Air India are among 82 Central Public Sector Enterprises this will be 'black' Diwali.
    JaiHind

    DisAgree [1] Agree [11] Reply Report Abuse

  • Narendra Kumar, Mangalore

    Wed, Oct 23 2019

    BJP Governments true color is exposed. When these two telecom companies are ailing and on the deathbed here comes a revival and merging after Modi and Ambani's Jio makes it's foothold. Modi hai to mumkin hai....Wah Modiji wah...Achhe Din promised and delivered by Modi to Adani and Ambani's who helped Modiji.

    DisAgree Agree [13] Reply Report Abuse

  • Monty Dotor, Mangalore

    Wed, Oct 23 2019

    Nothing related to spectrum allocation. BSNL will start 4G services from Udupi to Mangalore up to Netravati by end of October-A Deepavali gift.

    DisAgree Agree [6] Reply Report Abuse

  • William Rodrigues, Milagres, Mangalore

    Wed, Oct 23 2019

    This should have been done years before. But somebody was in slumber. Inbetween Jio got permission to start and go free on market for 6 months in turn pulling customers from other mobile internet providers and causing loss to Government. So far no company was allowed to go market free in the history of India except Jio. Got loan from public sector banks without any problem. Now for this BSNL no loan but public bonds!!!! What a joke? ... India is progressing on promises.

    DisAgree Agree [14] Reply Report Abuse

  • Stivan J Alva, Shankerpura, Udupi

    Wed, Oct 23 2019

    Government withheld the approval of 4g spectrum allocation till its private counterpart jio established fully. Now in deathbed Government appeared with drip. Why PSU's failing? BSNL case has right answer.

    DisAgree [2] Agree [19] Reply Report Abuse

  • Dr.S.Kamath, Mumbai

    Wed, Oct 23 2019

    BSNL not able to market and service 2G and 3 G what to talk about 4 G
    always strike for wage hike
    More over 4. G spectrum costs money in several thousands of crores which they dont have .After buying spectrum they have to put network towers they dont want to work .Come at 11 am go home at 4:30
    VRS is best for them

    DisAgree [12] Agree [4] Reply Report Abuse

  • Stivan J Alva, Shankerpura

    Wed, Oct 23 2019

    Some extent I agree sir. Even if we blame the worst servants of BSNL, a part of the blame must bear by the Master; that is none other than Government. There are very effective and efficient administrators in the Government. It could have been brought under track much before. What ever may be the reason behind, Governments act is in eleventh hour.

    DisAgree Agree [1] Reply Report Abuse

  • Jossey Saldanha, Atlanta

    Wed, Oct 23 2019

    I wonder why only Mukesh Ambani's Reliance Jio has been allocated 5G ...

    DisAgree [1] Agree [27] Reply Report Abuse

  • Tilak, Blore

    Wed, Oct 23 2019

    As per one eport, one of the union minister used 770 high capacity data lines from BSNL lines for his personal Use during UPA 2 tenure.

    DisAgree [1] Agree [1] Reply Report Abuse

  • Charles D'Mello, Pangala

    Wed, Oct 23 2019

    After suffocating them to near death, now they speak about revival.....!!!!!!!!!

    DisAgree Agree [23] Reply Report Abuse

  • Anilta, Uae

    Wed, Oct 23 2019

    Ambani s achhe Din.. Dokla gift to modi from Ambani for deevali... Citizens fooled nd ghar deewaali soon. Soon bhaktas of bsnl will start blaming.

    DisAgree [3] Agree [23] Reply Report Abuse


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Title: Cabinet nod to BSNL-MTNL merger, VRS, 4G spectrum allocation



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