Govt Merges MTNL Into BSNL, Okays ₹68,751 cr Bail-Out

The cabinet on Wednesday approved a proposal to merge public sector telcos BSNL and MTNL along with a Rs 68,751-crore investment package to revive the loss-making companies.

The revival plan includes 4G spectrum allocation and a voluntary retirement scheme to cut excess flab that has been hampering the efficiency of the two telecom companies.

“The Union Cabinet approved merger of the state-owned telecom firms and till the completion of the process, MTNL will operate as a subsidiary of BSNL,’’ Telecom Minister Ravi Shankar Prasad said here while disclosing details of the revival plan.

The package includes raising Rs 15,000 crore through the issue of sovereign bonds to meet the immediate capital requirement of both the companies, 4G spectrum allocation worth Rs 20,140 crore, an outlay of Rs 29,937 crore is being made for the VRS covering 50 per cent of their employees, while Rs 3,674 crore will be set aside for goods and services tax that will be levied on allocation of radiowaves.