THE Centre will take its call on the
proposed merger of state-run BSNL and MTNL in the next four-five
months, telecom secretary Rakesh Garg said. But there are hurdles
before the final merger takes shape.
"BSNL, MTNL merger decision will
be taken in four-five months after studying the IIM report on it,"
he said. The Indian...
Institute of Management (IIM) report on the
proposed merger is likely to be submitted shortly.
Communications and IT Minister Ravi
Shankar Prasad had earlier said BSNL and MTNL's debt stood at
Rs.4,459 crore and Rs.14,120 crore, respectively.
The department of telecommunication in
September 2014 had set a deadline of July 31, 2015 for closing the
merger of MTNL and BSNL.
Whereas MTNL operates in Delhi and
Mumbai, BSNL offers telecom services in the rest of the country.
BSNL with 61,622 mobile towers has the
second largest tower portfolio among all the telecom service
operators.
The Department of Telecom (DoT) had
asked IIM Bangalore to prepare a feasibility report on merger of
state-run BSNL and MTNL.
Garg said DoT will take 4-5 months to
study the report and then take a call on the merger.
In a bid to revive BSNL and MTNL, DoT
is taking various initiatives as both the state-run companies have
been making losses and losing market share to private telecom
operators.
BSNL had incurred Rs 7,019 crore loss
in 2013-14, Rs 7,884 crore in 2012-13 and Rs 8,850 crore in 2011-12,
whereas MTNL had reported a loss of Rs 5,322 crore in 2012-13 and Rs
4,109 crore in 2011-12.
The revenue has declined for reasons
including fixed to mobile substitution leading to surrender of
wireline connections, delay in expansion of GSM capacity, perceived
poor quality of customer services and high reduction in income from
sources other than services.
But the expenses for both the PSUs has
gone up because of legacy workforce whose salary and wages are more
than 50 percent of revenue, increasing repair and maintenance costs
and high interest burden in case of MTNL.
The government has time and again taken
a slew of measures to bring the two state-run companies out of
financial distress.
These include treatment of pensionary
liabilities of government employees absorbed in MTNL who opted for
combined service pension on parity with similar employees in BSNL,
waiver of government loan to BSNL involving an amount of Rs 1,411
crore and financial support of Rs 492 crore to MTNL towards payment
of minimum alternate tax.
In March this year, following a statement in
Parliament by heavy industries minister Anant Geete that five public
sector undertakings (PSUs) which are in the list of 65 sick PSUs
would be closed down, panic gripped many employees in MTNL also since
the once-crowning jewel of the government is now struggling for
survival. There were apprehensions that the Centre might sooner or
later close the telecom service provider since MTNL and Air India
have now been clubbed in the list of 65 sick PSUs. However, later
telecom minister Ravi Shankar Prasad said that there is no plan to
shut down loss-making telecom company MTNL, and the government is
taking various measures to revive it. The five PSUs to be closed down
include three HMT units, Geete had said. He, however, did not name
the other PSUs which are slated to be shut.
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