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Parliamentary panel recommends BSNL-MTNL merger to take on increased competition

December 26, 2017
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A parliamentary panel has recommended the merger of loss-making state-owned operators Mahanagar Telephone Nigam Limited (MTNL) and Bharat Sanchar Nigam Limited (BSNL) for their long-term survival and success. According to the Panel, the merger would give both BSNL and MTNL a chance to take on the increased competition in the Indian telecom market, which is currently witnessing consolidation among private players.

The Panel has noted that the Department of Telecommunications (DoT) had outlined two options after the Panel had previously recommended constitution of an expert group to examine the prospects of merger of MTNL and BSNL. One of the options, as per the panel, entailed MTNL focussing on turnaround with support from the government and shareholders and seeking opportunities to sell and divest select business assets. The second option was about seeking opportunities for the merger of MTNL with BSNL to become a pan-Indian integrated telecom operator offering fixed and wireless telephony services. This would also allow them to optimise resources and increase revenue through synergised operations.

The telecom ministry has informed the panel that the revival plan for MTNL prepared by the consultant Deloitte has been considered by the MTNL Board in their meeting in March 2017. After being recommended by the MTNL Board, the proposal was sent to the DoT and is currently under consideration.

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