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Indian DoT sets July 2015 deadline for MTNL-BSNL merger

India’s Department of Telecoms has implemented a deadline of July 31st 2015 for merging the two struggling state-owned operators, BSNL and MTNL (Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd).

In a presentation to Prime Minister Narendra Modi, the DoT laid out the road map leading up to the deadline, noting that it would conclude merger consultations with the operators’ unions by March 31st 2015. It also noted that it aims to "secure Cabinet approval for the proposed BSNL-MTNL merger by June 30 next year".

In addition, deadlines have been set for restructuring initiatives underway at both operators, such as BSNL’s current goal of spinning its tower business off into a wholly owned unit, which must now be completed by December 31st. The group has 61,622 mobile towers, with many co-located with landline exchanges.

Both operators also hold a number of properties, and the DoT plans to lease these out by the end of the year in order to contain losses. This includes allowing manufacturers to use its telecom factories on contract to raise cash.

MTNL is one of India’s smallest operators, providing services exclusively in the metropolises of Delhi and Mumbai. At the end of H1 2014 it had around 3.4 million subscribers. BSNL provides services throughout the rest of India and takes fifth place in the market with just under 90 million connections – however, it is losing customers, having shed around 6 million since the end of 2013.

Both companies incurred significant financial losses over the past year, with BSNL’s net loss a total of INR70.8 billion ($1.2 billion) and MTNL’s INR7.3 billion. The Modi government is attempting to revive the ailing operators as part of its Digital India initiative.

 

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