Govt defers plan to merge BSNL, MTNL due to financial reasons

Govt defers plan to merge BSNL, MTNL due to financial reasons

New Delhi: The government has deferred the merger of state-run telecom firms BSNL and MTNL due to financial reasons, Parliament was informed on Wednesday.

Minister of State for Communications Devusinh Chauhan in a written reply to the Rajya Sabha said that a proposal for the merger of Bharat Broadband Network Limited (BBNL) and Bharat Sanchar Nigam Limited (BSNL) is under examination.

"Government has approved the revival plan of Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) on October 23, 2019, which inter-alia includes in-principle approval for the merger of MTNL and BSNL. Due to financial reasons including high debt of MTNL, the merger of MTNL with BSNL is deferred," Chauhan said.

BSNL Chairman and managing director PK Purwar, who also heads MTNL, has submitted before a Parliamentary panel that the Department of Telecom should consider carving out of over Rs 26,500 crore debt of MTNL and its assets under a special purpose vehicle.

He suggested that thereafter operations of MTNL should be merged with BSNL.

MTNL was earlier expected to turn profitable by 2020-21 and BSNL by 2023-24 after both 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," MTNL CMD told the panel.

Moreover, the indigenous 4G telecom network will soon be rolled out across India with the BSNL planning to install about 1.12 lakh towers throughout the country, Telecom Minister Ashwini Vaishnaw said in Lok Sabha on Wednesday.

The minister also said the internet connection inside trains can be available only when the 5G network will be rolled out as communications get disrupted with 4G technology in trains running with the speed of 100 km per hour.

I am happy to inform you that the 4G telecom network is ready for roll out soon and it is developed in India by Indian engineers and scientists. Our development of 4G network is being appreciated worldwide and it has a core network, radio network with full telecom equipment, he said during Question Hour.

The minister said the BSNL is in the process of ordering 6,000 towers immediately and then 6,000 more and finally 1 lakh to be installed all over the country for the 4G network.

He said the development of 5G technology is going on in parallel and will be ready in a few months.

Asked about the availability of 4G internet service in trains, he said if a train is running more than 100 km speed, we need a 5G network .

There is disruption in the 4G network. But this is a time of technological evaluation and as the 5G is getting ready, 5G will also be available, he said.

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