Parliamentary panel suggests BSNL-MTNL merger for long-term survival

A Parliamentary panel in its report has suggested a merger of state-run telecom firms Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) for their long-term survival.

The Committee on Petitions, chaired by Bharatiya Janata Party MP Bhagat Singh Koshyari, in its report tabled in Lok Sabha on 16 March 2017, said that for the long-term survival and success, the merger of the MTNL and BSNL would be a good proposition. The panel opined that their merger would give both the entities a chance to compete against private sector players.

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In addition to this, the panel also suggested that the synergies and advantages inherent in an integrated national telecom infrastructure would pave the way for the lower cost of investment and greater combined ability to face competition.

As per reports, the panel was informed that both the public sector firms are in financial losses and are facing declining revenues from the loss of market share and increasing expenditure. The information was provided by the Department of Telecom (DoT).

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Highlights of the DoT’s information to the panel

• The two PSUs were not successful in investing adequately in the expansion and modernisation of their network, which leads to coverage issues.

• Now, these firms are taking steps to modernise their wireline and wireless networks.

• The panel was informed about phase 7 and 8 network expansion plan for BSNL.

• In the case of MTNL, the DoT informed that due to financial crunch, the firm was not able to upgrade its GSM and landline network for the last three-four years. But at present, it is exploring Managed Service Model with BSNL for its mobile services.

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Besides, urging the government to consider its findings in relation to the merger of BSNL and MTNL, the panel also requested it to constitute an expert committee.

The committee was formed to look into representation received by BJP MP Arvind Sawant regarding improvement in services provided by BSNL and MTNL.