BSNL, MTNL to be revived, merged

Capital infusion of over Rs 20,000 crore, government to bear cost of VRS

GN Bureau | October 23, 2019


#cabinet   #telecom   #PSU   #MTNL   #BSNL  


The union cabinet on Wednesday approved the proposal for revival of public sector telephony companies BSNL and MTNL by administrative allotment of spectrum for 4G services, debt restructuring by raising of bonds with sovereign guarantee, reducing employee costs, monetisation of assets and in-principle approval of merger of BSNL & MTNL.

The two firms have been in dire straits for long, and there were speculations over its future, but telecom minister Ravi Shankar Prasad told reporters after the cabinet meet that the two are neither being closed nor being divested.

The cabinet decided to go for administrative allotment of spectrum for 4G services to BSNL and MTNL so as to enable the two to provide broadband and other data services. The spectrum will be funded by the government by capital infusion in at a value of Rs 20,140 crore. In addition, the GST amount of Rs 3,674 crore will also be borne by the government through budgetary resources.

By using this spectrum allotment, BSNL and MTNL will be able to deliver 4G services, compete in the market and provide high-speed data using their vast network including in rural areas.
 
BSNL and MTNL will also raise long-term bonds of Rs 15,000 crore for which sovereign guarantee will be provided by the government, an official release said. With these resources, BSNL and MTNL will restructure their existing debt and also partly meet capex, opex and other requirements.
 
The two firms will also offer “attractive voluntary retirement scheme (VRS)” to their employees aged 50 years and above, the cost of which will be borne by the government through budgetary support. The ex-gratia component of VRS will require Rs. 17,169 crore. The government will also meet the cost towards pension, gratuity and commutation. Details of the scheme will be finalised by BSNL/MTNL.
 
BSNL and MTNL will monetise their assets so as to raise resources for retiring debt, servicing of bonds, network upgradation, expansion and meeting the operational fund requirements.
 
The cabinet granted in-principle nod to the merger of BSNL and MTNL. “It is expected that with the implementation of said revival plan, BSNL and MTNL will be able to provide reliable and quality services through its robust telecommunication network throughout the country including rural and remote areas,” the official note added.

Comments

 

Other News

Kerala’s Industrial and Commercial Policy: A case for collaboration, consultation

In 2014, the Ministry of Law and Justice published India’s ‘Pre-Legislative Consultation Policy’ or PLCP, a landmark policy that outlined a process and recommendations for lawmaking, through the incorporation of public participation and opinion. In 2024, we mark a decade of this policy, w

Elections 2024: Why Mumbai and Maharashtra verdict is crucial

In the ongoing Lok Sabha elections, Maharashtra with 48 Lok Sabha seats is of crucial importance for the final outcome. In the 2019 election, the Shiv Sena-BJP alliance won 42 seats including six seats in Mumbai, as well as one each in Thane, Kalyan, Bhiwandi, and Palghar, which fall in the Mumbai Metropol

Jammu-Kashmir makes indelible mark on electoral history

In a massive stride for India’s electoral polity, Jammu and Kashmir has registered its highest poll participation in the last 35 years in the General Elections of 2024. The Combined Voter Turnout (VTR) at the polling stations for the entire union territory, which has 5 Lok Sabha seats

New study tracks heat wave; exposes dangerous trends in big cities

An unprecedented heat wave has been enveloping Indian cities, worsening the urban heat island effect, this summer. A new analysis by Centre for Science and Environment (CSE) says there are far deeper and longer term evidences on the nature of this changing trend that is impacting the biggest cities of the

Phase 6: Voter turnout 59.06% at 7:45 PM

Polling in the sixth phase of General Elections 2024 which commenced across 58 PCs recorded an approximate voter turnout of 59.06% as of 7:45 pm Saturday. In spite of hot weather in certain parts of the country, voters were undeterred in their enthusiasm as they were seen queuing up patient

Banks not adhering to RBI guidelines, finds study

Banks across India are levying inconsistent service charges on basic savings accounts. A study, “Benchmarking Reasonableness of Service Charges by Banks in India”, uncovers and exposes inconsistencies in adherence to RBI mandates by banks. It finds some banks impose charges exceeding reasonable

Visionary Talk: Amitabh Gupta, Pune Police Commissioner with Kailashnath Adhikari, MD, Governance Now


Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter