BSNL, MTNL to be merged

Bringing good news ahead of Diwali for employees of BSNL and MTNL, the Union Cabinet approved revival of the two Public Sector Undertakings with in-principle approval of their merger, allotment of 4G spectrum services, debt restructuring by raising of bonds with sovereign guarantee, and reducing employee costs and monetisation of assets.

Union Telecom Minister Ravi Shankar Prasad said, “There would be administrative allotment of spectrum for 4G services to BSNL and MTNL so as to enable these PSUs to provide broadband and other data services.”

He said the spectrum will be funded by Government of India by capital infusion in these PSUs at a value of Rs.20,140 crore in addition. The GST amount of Rs.3,674 crore to this spectrum value will also be borne by the government through budgetary resources. By using this spectrum allotment, BSNL and MTNL will be able to deliver 4G services, compete in the market and provide high speed data using their vast network including in rural areas.

Both BSNL and MTNL will also raise long-term bonds of Rs.15,000 crore for which sovereign guarantee will be provided by the Centre.

Also on offer is a Voluntary Retirement scheme for employees of the PSUs who have reached the age of 50 years. The cost of VRS – about Rs.17,169 crore – will be met through budgetary support. Operational cost of the PSUs will be met through monetising the assets.

“The VRS package approved by the Cabinet will give eligible employees 125 per cent of income that they would have earned by serving the company till the age of 60 years. With this decision, we have taken care of the interest of lakhs of employees of these PSUs,” Prasad said.

BSNL has around 1.68 lakh employees and MTNL around 22,000.

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