The Union Cabinet on Wednesday, 23 October, approved the revival plan for the loss-making telecom Public Sector Undertakings (PSUs) Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL), giving an in-principal nod for the merger of the two.
The government said it will put in Rs 29,937 crore for revival of the two state-owned telecom companies.
“MTNL and BSNL are neither being closed nor divested,” Telecom Minister Ravi Shankar Prasad said.
As part of the revival plan the government has planned to raise Rs 15,000 crore sovereign bonds and monetise assets worth Rs 38,000 crore in the next four years. Additionally, voluntary retirement scheme (VRS) will be offered to the employees of these companies to cut cost.
However, Prasad said the merger will not happen immediately, as MTNL is a listed company and due process will have to be followed.
MTNL will be a subsidiary of BSNL till the merger is completed as part of the revival plan, he added.
The cabinet also approved the allocation of 4G Spectrum to BSNL and MTNL on 2016 spectrum allocation prices to help them start 4G services.
‘PM Has Offered a Very Generous Financial Assistance’
In a statement, the Office of Ravi Shankar Prasad tweeted, "BSNL and MTNL are strategic assets of India. They cater to the needs of people during disaster. They provide important communication services to the government."
The statement also thanked Modi for his financial assistance to the ailing telecom companies. It further urged the employees of both the PSUs to “work hard and help the government in making these organisations profitable.”