On Wednesday the news regarding the postpone merger between the two companies due to financial reasons were informed to Parliament.
Minister of State for Communications Devusinh Chauhan in a written reply to the Rajya Sabha said that a proposal for the merger of Bharat Broadband Network Limited (BBNL) and Bharat Sanchar Nigam Limited (BSNL) is under examination.
“Government has approved the revival plan of Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) on October 23, 2019, which inter-alia includes in-principal approval for the merger of MTNL and BSNL. Due to financial reasons including high debt of MTNL, the merger of MTNL with BSNL is deferred,” Mr Chauhan said.
BSNL Chairman and Managing Director (CMD) PK Purwar, who also heads MTNL, has submitted before a Parliamentary panel that the Department of Telecom should consider carving out of over ₹ 26,500 crore debt of MTNL and its assets under a special purpose vehicle.
“With ₹ 26,000 crore debt, even if God comes to earth and tries to address its problems, the company cannot be revived. It is a fact of life; we have to accept it,” MTNL CMD told the panel.
