BSNL-MTNL merger: What it means

The government on Wednesday approved a Rs 69,000-crore revival package for BSNL and MTNL that includes merging the two loss-making firms, monetising their assets and giving VRS to employees so that the combined entity turns profitable in two years.

The Union cabinet headed by Prime Minister Narendra Modi approved a plan to combine Mahanagar Telephone Nigam Ltd – which provides services in Mumbai and New Delhi – with Bharat Sanchar Nigam Ltd that services the rest of the nation, telecom minister Ravi Shankar Prasad said here.

The package approved includes infusion of Rs 20,140 crore capital for purchase of 4G spectrum, Rs 3,674 crore for GST to be paid on spectrum allocation, companies raising Rs 15,000 crore in debt on the sovereign guarantee and government funding Rs 17,160 crore voluntary retirement scheme and another Rs 12,768 crore towards retirement liability.