Merger bells ring for BSNL, MTNL

The Union cabinet on Wednesday approved the merger of MTNL and BSNL, in a Rs 69,000-crore revival package for the telecom PSU duo that envisages a VRS covering 50 per cent of the employees, the issue of Rs 15,000-crore of sovereign bonds to partially fund the rescue plan and allocation of 4G spectrum.

“BSNL and MTNL are not being closed, divested or hived off to any third party. They are a strategic asset. We want to make them competitive, bring in professionalism,” Union communications minister Ravi Shankar Prasad said after the cabinet meeting.

Prasad said before the merger, MTNL will be a subsidiary for BSNL and the government expects the companies to become profitable over the next two years. BSNL is unlisted, while MTNL is listed, though its net worth has turned negative.