August 22, 2019 | 3:19 PM IST
Market

Rescue Plan: DoT could merge telecom operators MTNL, BSNL

As part of revival plan for distressed telecom operators Mahanagar Telephone Nigam Limited (MTNL) and Bharat Sanchar Nigam Limited (BSNL), the Department of Telecommunications (DoT) is likely to go ahead with their merger. While MTNL serves Delhi and Mumbai, BSNL covers the remaining circles.

The rescue package entails components like voluntary retirement scheme (VRS), asset monetisation and allocation of 4G spectrum. With regards to BSNL, the loss is estimated to be around Rs 14,000 crore with a decline in revenue to Rs 19,308 crore in 2018-19. It has a total of 1,65,179 employees and the total employees’ cost 75 per cent of the total income of the company. As of April 1, 2019, BSNL’s net worth was estimated to be Rs 34,276 crore (unaudited and provisional) while MTNL reflected a negative networth of Rs 9,735 crore, informs a report.

In contrast to the above Airtel has around 20,000 employees and come at a cost of 2.95 per cent of the company’s income while Vodafone has 9,883 employees costing at 5.59 per cent.

The rescue plan will require a nod from the Telecom Ministry. A source revealed that the proposal will be sent to the ministry once it is complete. The telecom minister Ravi Shankar Prasad has approved a memo that allows setting up of a joint committee to be put in place to oversee the entire process over the next 18 months.

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