New Delhi: The Union Cabinet today approved merger of loss-making telecom firms BNLL and MTNL as part of a revival package that includes raising sovereign bonds, monetising assets and voluntary retirement scheme (VRS) for employees. The revival package for BSNL and MTNL includes raising of ₹15,000 crore sovereign bonds and monetising ₹38,000 crore of assets in next four years.
Pending the merger, MTNL will act as a subsidiary of BSNL.
BSNL has 1.76 lakh employees across India while MTNL has around 22,000 employees. The employee cost of BSNL is 75% and that of MTNL is 87% of their total income.
Briefing the media on decisions taken by the Cabinet headed by Prime Minister Narendra Modi, Union Telecom Minister Ravi Shankar Prasad said the government will put in ₹29,937 crore for revival of the two state-owned telecom companies.
Besides, in order to cut cost, a voluntary retirement scheme will be offered to employees to cut cost, he said.
State-owned operators BSNL and MTNL saw 2.15 lakh and 6,701 subscribers exiting their networks in August respectively.
As on August 31, private operators held held 89.78% market share of the wireless subscribers whereas BSNL and MTNL, the two PSU access service providers, had a market share of only 10.22%, according to latest TRAI data.