1. MTNL, BSNL revival on cards? This is what Narendra Modi government is planning

MTNL, BSNL revival on cards? This is what Narendra Modi government is planning

For the revival of state-owned, loss-making telecom firms MTNL and BSNL, the government is now toying with the idea of merging the wireless business of the former with the latter.

By: | New Delhi | Published: October 11, 2017 6:11 AM
MTNL, BSNL , Narendra Modi Government MTNL reported a consolidated net loss of Rs 2,396 crore in 2016-17. (PTI)

For the revival of state-owned, loss-making telecom firms MTNL and BSNL, the government is now toying with the idea of merging the wireless business of the former with the latter.

The wireless business of MTNL is very small — it provides services only in two circles, Delhi and Mumbai, and has a total subscriber base of just 0.36 million.

Though a merger of BSNL and MTNL has been on and off the government’s table for the last several years, this latest proposal of just merging the wireless unit of MTNL with BSNL is being discussed because it is simple to achieve. Since MTNL is a listed entity and BSNL is not, a proper merger between the two would entail a reverse merger process.

Second, transfer of staff is problematic because of seniority and different pay scale issues.

Simply merging the wireless businesses would not need to get into such complexities and would also achieve the purpose of a single government entity having a pan-India mobile operations.
Currently, while MTNL provides mobile services in Delhi and Mumbai, BSNL is not present in these two circles. In the past, both the companies have sought government permission to branch out in areas where they are not present but were not allowed.

While the government may be able to buy some time if the plan to merge the wireless business of MTNL with BSNL finally gets approved, analysts said that it would be a case of too little, too late. Both the companies are saddled with huge staff and stagnant revenues and have been making losses for more than five years now.

For instance, MTNL reported a consolidated net loss of Rs 2,396 crore in 2016-17 against a net loss of Rs1,946 crore in FY16. Its revenue was also lower in FY17 at Rs 3,655 crore against Rs 3,794 crore a year ago.

Similarly, BSNL reported a loss of Rs 7,019 crore in 2013-14 and Rs 8,234 crore in 2014-15. The loss fell by less than half to Rs 3,880 crore in 2015-16. Its revenue increased from Rs 26,153 crore in 2013-14 to `27,242 crore in 2014-15 and to Rs 28,449 crore in 2015-16. The company is yet to announce its FY17 earnings. It has a total mobile subscriber base of 104.55 million.

  1. P
    P d amarnath
    Oct 15, 2017 at 12:07 pm
    That's a great idea. I request concerned authorities to implement it on urgent basis and with out any further delay. This will be a great boon to the BSNL mobile users and also to MTNL users. Do it fast please.
    Reply
    1. S
      SS
      Oct 11, 2017 at 6:38 pm
      Close both. Stop bleeding the country and customer by them.
      Reply
      1. S
        S Gopal
        Oct 12, 2017 at 5:36 am
        For the record BSNL maintains the lowest debt to equity ratio in the telecommunications sector, moreover BSNL been reporting operational profits for a few years now and is posed to post profits in the near future. Since 2014 there has been visible improvements in the BSNL wired and wireless networks, their marketing arm has swung into action after having been dormant for close to half a decade, their tariffs (especially their prepaid tariffs) have been periodically revised to match up or offer a better deal to their customers, they have started advertising and improving their b image with slogans such as Behtar Sevaki Nayan Lagan and with policies that are customer centric with initiatives such as SWAS (Service With A Smile). Another important point to note is that BSNL along with RailTel and PowerGrid, remains the driving force in the implementation of the prestigious Bharat Net project to connect 2,50,000 gram panchayats with high speed internet connectivity.
        Reply
      2. M
        mayavan
        Oct 11, 2017 at 3:51 pm
        Govt shoild invite private involvement adsell shares to the public..Plenter any BSNL building tall spacious but a ghost out look and an old thasildar office .Nobody is interested to improve working conditions and remove unhelpful service.At least aviod tax payers money to these govt monsters..Open up service and profit moto to public rekindle public's faith
        Reply
        1. S
          S Gopal
          Oct 12, 2017 at 5:48 am
          BSNL is yet to be depedant upon tax payers money. MTNL in 2001 was listed on the New York Stock Exchange (NYSE) and remained till 2013, it was a blue chip company and remains a Navratna central public sector enterprise. Both the companies for many years contributed a nice divident. The companies possess the ability ot come out of the financial losses and into profitabilty, as shown by BSNL in the past few years when it has been posting operational profits with the likelihood of profits in the financial years ahead . The plan of merging the wireless operations of MTNL with BSNL it is a step in the right direction.
          Reply

        Go to Top