BSNL Revival Plan
The Union Cabinet on October 23, 2019 approved the proposal for revival of BSNL and MTNL. It allotted the 4G spectrum to the institutions. The MTNL will act as a subsidy to BSNL. A four-step revival plan has been announced for BSNL. Also, the GoI plans to raise Rs 15,000 crore through sovereign bonds.
Both BSNL and MTNL were making losses for the state since a long time. MTNL is Mahangar Telephone Nigam Limited, a state-owned entity that provides telecom services at New Delhi and Mumbai and in Mauritius. It was founded in 1882. There are around 25,191 employees working with the company.
The BSNL loss is estimated to be around Rs 14,000 crore with a decline in revenue of Rs 19,308 crores during 2018-19. The loss of MTNL was around Rs 755 crores (in Q4, May 2019). The companies hold salary dues and pension dues for the employees. The total debts held by the companies amount to Rs 40,000 crores.
With merger under Rs 70,000 crore plan and 4G spectrum offering will help the entities in monetizing their assets. They can raise capital expenditure required to roll out the network and bring in efficiency in their operations.