BSNL-MTNL Merger

Dominant companies like Vodacom and MTN say mergers would allow them to leverage existing networks as a springboard to extending and improving coverage

The MTNL board has approved a service agreement with BSNL for a period of ten years, and also a slew of other proposals, including share-sale in overseas subsidiary Mahanagar Telephone (Mauritius). The board, during its meeting, has also approved sale of shares of MTNL in MTNL STPI IT Services Ltd or MSITS, according to regulatory filing by MTNL. The board "accorded its approval to enter into a service agreement between BSNL and MTNL for a period of 10 years or unless it is revoked earlier by giving a notice of six months or extended by mutual consent between the parties, subject to approval of the said service agreement by Department of Telecom / Ministry of Company Affairs ," it said. It has also approved a proposal related to sale of shares of MTNL in Mahanagar Telephone (Mauritius) Ltd or MTML - an overseas wholly-owned subsidiary - in line with applicable Department of Investment and Public Asset Management (DIPAM) guidelines and other regulatory processes. The board has also

In past four trading days, the stock has zoomed 50% on reports that the government was considering the option of handing over operations of telecom company to Bharat Sanchar Nigam Limited (BSNL).

Reports claim that the government was considering the option of handing over operations of MTNL to BSNL through an agreement, instead of pursuing a merger route.

This is a departure from the govt's earlier plan of merging the two entities

According to a report, the govt has asked these firms to identify core and non-core assets with a value of up to Rs 10 crore that can be monetised

Given the complexity involved in the merger, it will take about two years to complete the whole process

The government should have merged BSNL and MTNL, and then looked at such a move, says an analyst

The government has deferred the merger of state-run telecom firms BSNL and MTNL due to financial reasons, Parliament was informed on Wednesday

BSNL Employees Union on Wednesday appealed to PM Modi to "drop proposal to merge MTNL with BSNL"

Public sector telcos continue to lose ground

It is learnt that the valuation done by the two companies is much higher than the one arrived at by the transaction advisors

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Move to merge may erode BSNL value, say officials

Services likely to be offered in Mumbai, New Delhi initially

For BSNL to be eligible for guarantee of Rs 8,500 crore, and MTNL to be eligible for guarantee of Rs 6,500 crore, the state-run telcos will have to pay a 1 per cent fee each.

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This is because the Union Budget does not have provision for any expenditure towards the programme in the current fiscal year

On October 25, the Centre approved a Rs 69,000 crore revival package for BSNL and MTNL

The company has received interest from 14,387 employees for the voluntary retirement scheme which Kumar expects will result in annual savings of Rs 1,700 crore for MTNL