The government is planning to merge the state telecom operators Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) as reported by DNA.
Inducting VRS Plan
A meeting has been scheduled on July 4th for the committee of secretaries (CoS) to conclude a revival plan. A set of measures planned by the Department of Telecommunications will be put up before the CoS for consideration, sources confirmed.
As per the plan, the center also plans to undertake a voluntary retirement scheme (VRS) for employees of the Public Sector Units (PSUs). Asset sale including land monetization will also be considered in order to pull sick entities out of their ongoing financial crunch.
Although one of the biggest problems other than different salary structure of both the firms is the listed status of MTNL which would require necessary regulatory approvals.
Reason Behind the Merger
The merger has been discussed for years now and both companies have already integrated a few back-end services to bring in synergies and cut costs.
Both companies have taken beatings due to increased cutting competition in the telecom sector. BSNL which had in 2005 recorded a profit of Rs 10,000 crore, for the first time in history reported a loss of Rs 7,500 crore last year. Salaries of employees have also been withheld since February due to the cash crunch.
Bharat Sanchar Nigam Limited (abbreviated BSNL) is an Indian state-owned telecommunications company headquartered in New Delhi.
Mahanagar Telephone Nigam Limited (MTNL) is a state-owned telecommunications service provider in the metro cities of Mumbai and New Delhi in India and in the island nation of Mauritius in Africa.
With the upcoming competition in the market because of the rapid expansion of Jio and other telecom operators. BSNL and MTNL certainly lacked the innovative edge and insights towards consumer demands, hence failing to keep up the pace with the leaders.
#bsnl #mtnl #telecom