The government is likely to temporarily not proceed with the plan of merging state-owned telecom players Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) after almost two decades of deliberations on the matter. This comes in after a six-member group of ministers (GoM) recommended last week that it would be neither feasible nor beneficial thereby closing a long-drawn chapter in the telecom sector, Business Standard reported.
The Union Cabinet might soon meet and formally decide on the matter. The Department of Telecommunications (DoT) is also in favour of scrapping the merger.
The GoM comprised of Defence Minister Rajnath Singh, who chaired the meeting last week along with Telecom Minister Ravi Shankar Prasad, Finance Minister Nirmala Sitharaman, Commerce Minister Piyush Goyal, Home Minister Amit Shah, Petroleum and Natural Gas Minister Dharmendra Pradhan.
The GoM decided against combining the two entities in order to prevent further erosion of BSNL’s value.
In October 2019, the Cabinet had approved a Rs 70,000 crore package to revive BSNL and MTNL.
BSNL and MTNL turned EBITDA positive in the first half of FY21, the telecom regulator said on January 11.