Govt To Try Merging BSNL & MTNL Again, Appoints Deloitte As Advisor: Report

The government seeks merging state-owned Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL), trying that again after unsuccessful attempts in 15 years.

The government has appointed the accounting and consulting firm Deloitte as the transaction advisor, the Financial Express (FE) reported on Wednesday.

Deloitte is expected to submit its analysis on how the merger could be done in the next six to seven months, the report said. Given the complexity, the merger may take about two years to complete.

The merger is a part of the Rs 1.64 trillion revival package for BSNL the government approved in July last year. In the cabinet note, the government had said that it would form a committee of secretaries from different ministries to decide on the merger of the two companies, the report added.

In an interview with FE last week, telecom secretary K Rajaraman confirmed that the transaction advisor has been appointed. However, Rajaraman did not disclose the name of the company appointed as the advisor.

“Since MTNL is a listed company, the process takes time. The transaction advisor will have to go through the process related to the merger and then they will come back,” the FE report quoted Rajaraman as saying.

A union representing BSNL employees, in a letter to the Prime Minister Narendra Modi in 2022, said the merger will damage the telecom company and they were against it.

The government put the merger proposal on hold last year for financial reasons. BSNL constituted an internal committee to look into the aspects of the merger.

The Rs 1.64-trillion announced last year was the second revival attempt for BSNL since 2019 when Rs 69,000-crore plan was announced. That plan included equity infusion, asset monetisation, the merger of BSNL with MTNL, and a voluntary retirement scheme.

BSNL has been saddled with steep losses (over Rs 50,000 crore in the past five years) and obsolete technology, resulting in a decline in revenues and customers, Business Standard reported last year.