Lok Sabha Question No. 490 (UNSTARRED), answered on 2019-11-20
Subject: Merger of BSNL and MTNL
Ministry: COMMUNICATIONS
Asked by: Bharatiben Dhirubhai Shyal, Khagen Murmu, Queen Oja, Sunil Kumar Pintu, Ajay (Teni) Misra, Shobha Karandlaje

## GOVERNMENT OF INDIA MINISTRY OF COMMUNICATIONS DEPARTMENT OF TELECOMMUNICATIONS

## LOK  SABHA UNSTARRED QUESTION NO. 490 TO BE ANSWERED ON 20 TH   NOVEMBER, 2019

## MERGER OF BSNL AND MTNL

## †490.   DR. BHARATIBEN DHIRUBHAI SHIYAL:

SHRI KHAGEN MURMU:

SHRIMATI QUEEN OJA:

SHRI SUNIL KUMAR PINTU:

SHRI AJAY KUMAR MISRA TENI:

KUMARI SHOBHA KARANDLAJE:

Will the Minister of COMMUNICATIONS be pleased to state:

- (a) whether the Government has given in-principle approval to the merger of State run Telecom Service Providers (TSPs) MTNL and BSNL and if so, the details thereof and the time by which these two TSPs are likely to be merged;
- (b) whether the Government has any action plan to strengthen/revive/bailout the aforesaid TSPs and  if  so,  the  details  thereof  and  if  not,  the  reasons  therefor  along  with  the  steps  taken  by  the Government in this regard;
- (c) the  extent  to  which  the  condition  of  these  TSPs  is  likely  to  be  improved  by  the  aforesaid action plan;
- (d) whether BSNL has been reporting losses continuously since 2009-10 and has been declared incipient sick and if so, the details thereof and the reasons therefor;
- (e) whether the Government has formulated any scheme to equip mobile towers of the said TSPs with 4G services and if so, the details thereof and if not, the reasons therefor;
- (f) the  steps  taken  by  the  Government  to  leverage  the  spectrum  allotment  to  make  BSNL  and MTNL competitive in the telecom market; and
- (g) whether  both  TSPs  will  offer  voluntary  retirement  to  their  employees  aged  fifty  years  and above through attractive VRS options and if so, the details thereof?

## ANSWER

## MINISTER OF COMMUNICATIONS, LAW & JUSTICE AND ELECTRONICS AND INFORMATION TECHNOLOGY (SHRI RAVI SHANKAR PRASAD)

- (a) The Cabinet in its meeting held on 23-10-2019 approved the revival plan for Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) which inter-alia includes

in-principle  approval  for  merger  of  BSNL  and  MTNL.  The  process  of  merger  is  likely  to  be completed in 18-24 months.

(b) & (c) A Cabinet Note for the revival of BSNL and MTNL was prepared by Department of Telecommunications (DoT) and submitted for the consideration of the Cabinet. The Cabinet in its meeting held on 23-10-2019 approved the revival plan for BSNL and MTNL.

The  revival  plan  inter-alia  includes  measures  to  reduce  the  staff  cost  through  a  Voluntary Retirement Scheme (VRS), administrative allotment of spectrum to BSNL and MTNL for providing 4G services, monetisation of assets of BSNL and MTNL, debt restructuring by raising of sovereign guarantee  bonds  and  in-principle  merger  of  BSNL  and  MTNL.  With  the  implementation  of  the revival plan, it is expected that both PSUs will turnaround in future.

(d) BSNL  is  incurring  losses  since  2009-10.  Based  on  the  financial  performance  of  BSNL, Department of Telecommunications (DoT) classified BSNL as 'Incipient sick' in September 2017. Stiff competition in mobile segment, high employee cost and absence of 4G services (except in few places for BSNL) in the data-centric telecom market is adversely affecting the competitive strength of BSNL.

(e) & (f) The Cabinet has approved administrative allocation of spectrum to BSNL and MTNL for providing 4G services through capital infusion by the Government.

(g) The Cabinet has approved to offer a Voluntary Retirement Scheme (VRS) to the employees of BSNL and MTNL of age 50 years and above.

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