One of the very big telecom mergers is set to take place in July next year. The two well-known PSUs BSNL and MTNL will become one entity and will provide services and will handle operations together. Presently, BSNL provides services to the entire country except Delhi and Mumbai, while MTNL provide services in these two areas.
As reported by PTI, BSNL Director (consumer mobility) Anupam Shrivastava said, “The deadline of June-July 2015 has not been officially commissioned to the organisation but the merger is likely to take place in the time frame”. He also stated that some of the issues pertaining to the payment of salaries and debt will be sorted before the merger takes place.
“Commercially it makes sense for the two companies to merge as it will lower the tax outgo. Currently, BSNL is billing MTNL and vice versa for services for which both are paying taxes. If it becomes one entity, the tax outgo will be less”, Shrivastava told PTI.
Apart from this there are many other issues which have to be taken care before exercising this strategic decision. Firstly, MTNL is a listed company and the government has to decide as to how it can be merged with BSNL. Secondly, there is a huge salary difference between the two PSUs. The salary of MTNL employees is higher as compared to the BSNL employees. Thirdly, and one of the major issue is of debt on MTNL, which is a big concern for BSNL.
This is considered to be one of the biggest telecom mergers and it will also be interesting to see that as to how all these issues will be resolved before the merger.