BSNL employees union urges PM to drop MTNL merger proposal

BSNL Employees Union on Wednesday appealed to Prime Minister Narendra Modi to drop the proposal to merge MTNL with BSNL.

In a letter, addressed to the prime minister, the union suggested that the government should instead take over MTNL’s Rs 26,000-crore debt and also provide financial assistance to BSNL.

Citing reports of government taking action to merge BSNL, MTNL and BBNL with the view to convert them into a single entity, the union stated, “We fervently appeal to you to kindly drop the proposal to merge MTNL with BSNL. Alternatively, the government should take over MTNL’s debt of Rs 26,000 crore. In addition to this, the government should also provide sufficient financial assistance to BSNL, for the rehabilitation of the networks of MTNL. This demand is being raised because, both the mobile, as well as landline networks of MTNL are in a dilapidated condition.”

On Monday, the Parliamentary Standing Committee on Communications and Information Technology, chaired by Lok Sabha member Shashi Tharoor, directed the Department of Telecom (DoT) to consider carving out MTNL’s debt and assets into a special purpose vehicle and then merge its operations with BSNL

The panel also recommended that the loss-making BSNL should be allocated spectrum for rolling out 5G services at par with private telecom operators in the country.

According to a submission made by BSNL and MTNL Chairman and Managing Director P K Purwar to the panel, BSNL is expected to turn profitable by 2025-26 while survival of MTNL is not possible because it has debt of over Rs 26,000 crore and revenue of Rs 1,300 crore.

“The committee recommends that the department should consider various options including carving out the debt and assets like in Air India and merging operations with BSNL as suggested by CMD, BSNL & MTNL and come out with some viable proposal regarding future of MTNL,” the panel said in its report tabled in Parliament on Monday.

The panel also said that it was conscious of the fact that any decision on shutting down MTNL would have a negative impact on the public sector banks.

MTNL was earlier expected to turn profitable by 2020-21 and BSNL by 2023-24 after both the PSUs were jointly given a relief package of around Rs 70,000 crore in 2019.

“With Rs 26,000 crore debt, even if God comes to earth and tries to address its problems, the company cannot be revived. It is a fact of life; we have to accept it,” Purwar told the panel.

The panel noted that in spite of the implementation of revival plan, the projected net loss of BSNL for the year 2022-23 is Rs 5,986 crore.

The projected net loss of MTNL for the year 2022-23 is Rs 3,139.60 crore. The company, however, is reporting operational profit.

The panel was also informed that the implementation of the revival plan, VRS, has been successfully implemented at BSNL and MTNL. It has led to around 50 per cent salary bill reduction at BSNL and around 90 per cent at MTNL.

The DoT informed the committee that the projected net loss of BSNL is due to the absence of 4G services, decline in landline revenue, non-availability of funds for capital expenditure.

The government has allocated an amount of Rs 44,720 crore to BSNL for implementation of various revival measures during 2022-23, and an amount of Rs 23,270 crore (inclusive of GST) is allotted for the cost of 4G spectrum in financial year 2022-23.

In the report, the panel said that rolling out of 4G services by BSNL will greatly help the company in not only strengthening its foothold in the telecom sector but also in increasing its revenue earning. BusinessToday