DoT to send BSNL, MTNL merger plan to cabinet soon

The Department of Telecom (DoT) is planning to place merger proposal of loss making state-run telecom firms BSNL and MTNL before the Cabinet by June this year. The DoT has informed the Parliamentary Standing Committee on Information Technology headed by BJP MP Anurag Thakur that in the current financial year 2016-17, (up to December 2016), BSNL has received a total income of Rs 20,291 crore and incurred an expenditure of Rs 25,145 crore leaving a gap of Rs 4,854 crore. MTNL, as on December 31, 2016, has a total of Rs 14,809 crore financial liability.

The DoT said that there are three lakh government employees in both the firms without having the required skill to cope with the latest technology, as they were mainly employed for repairing landlines. The committee in its report tabled in Parliament said that “the DoT may look into possibility of enhancing the skill of these employees for gaining utilisation of their services. If not possible, the best way is to extend VRS to those employees who can no longer be skilled since extending VRS will help reduce the employee cost”.

The VRS proposal, which was proposed earlier, was not approved by the Cabinet due to financial constraints. The DoT should come out with a revised VRS proposal, said the panel. While informing the panel that the companies were facing number of problems including poor quality of service, the DoT said that the government has short-, medium-, and long-term measures to revive them.  

“The DoT should prepare a final concrete action plan for the revival of the two companies and place this before the competent authority for approval at the earliest. With regard to the merger of BSNL and MTNL, the committee recommended that the case of merger of Air India and Indian Airlines should be carefully examined while developing a merger plan and the same should be implemented only with the objective to make them strong,” the panel said.