How Merging BSNL and MTNL are Better for the Govt's .Telecom Business in India

Government has concluded in merging the two public telecom units for furtherance in the sector
How Merging BSNL and MTNL are Better for the Govt's .Telecom Business in India
Image credit: PIB
Entrepreneur Staff
Correspondent, Entrepreneur India
2 min read

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

Indian government has taken up the call to lift the air of uncertainty over the two public telecom companies i.e. MTNL (Mahanagar Telephone Nigam Limited) and BSNL (Bharat Sanchar Nigam Limited). Apart from merging the two financially stressed government entities, administration has decided to provide them with the package of around INR 70,000 crore.  

According to the Business Standard report, the Government mentioned that both public sector units are strategically important for the country’s growth and will not be shut down or disinvested. Addressing the press media, Minister for Telecom, Ravi Shankar Prasad said that neither government was shutting down nor divesting stakes in BSNL and MTNL.

The package moved by the administration will include the benefits for the staff as well as the sector. Merging of two public sectors will result in bringing up the telecom capital and increasing its standard. Availing VRS by the employees will help the sector in cost cutting and would provide margin to the companies to settle the capital influx accordingly. 

Pull -Out Plan 

INR 20,000 Crore will be infused in the sector to fund 4g spectrum allotment to BSNL and MTNL. 

INR 15,000 Crore will be allotted to the telecom sectors units i.e. BSNL and MTNL as long term bonds for which government will provide sovereign guarantee. 

INR 17, 169 Crore is a planned amount to be given as an additional budgetary support for the employees to avail for VRS services to be provided by the public telecom sectors. 

Telecom Secretary Anshu Prakash said the range will be designated to both the organizations authoritatively within a month. BSNL will likewise require around INR 10,000 crore to turn out 4G benefits in phases and MTNL an expected INR 1,100 crore. "The range allotment to BSNL worth INR14,115 crore will be in lieu of value shares and about INR 6,295 crore for MTNL in lieu of particular offers," Telecom Minister Ravi Shankar Prakash said,. oOn monetisation of land proprerty assetsassests, Prasad said resources worth INR 38,000 crore had been shortlisted. The benefits principally include land as well as renting of structures. MTNL has around 29 retail outlets in Delhi alone.

More from Entrepreneur

Get heaping discounts to books you love delivered straight to your inbox. We’ll feature a different book each week and share exclusive deals you won’t find anywhere else.
Jumpstart Your Business. Entrepreneur Insider is your all-access pass to the skills, experts, and network you need to get your business off the ground—or take it to the next level.
Starting, buying, or growing your small business shouldn’t be hard. Guidant Financial works to make financing easy for current and aspiring small business owners by providing custom funding solutions, financing education, and more.

Latest on Entrepreneur