Cabinet Committee on Economic Affairs on Wednesday gave an in-principle nod to a proposed merger of Mahanagar Telephone Nigam Limited (MTNL) with Bharat Sanchar Nigam Limited (BSNL) in a bid to revive debt-ridden state-run telecom operators. "The government is neither closing nor divesting stake in MTNL and BSNL," Union Minister Ravi Shankar Prasad said in a press briefing on Wednesday. The move comes at a time public sector companies MTNL and BSNL are facing financial stress amid intense competition in the telecom sector.
Briefing reporters on decisions taken by the Cabinet headed by Prime Minister Narendra Modi, Telecom Minister Ravi Shankar Prasad said the government will put in ₹29,937 cr. for revival of the two state-owned telecom companies.
The revival package includes raising of ₹15,000 cr. sovereign bonds and monetising ₹38,000 cr. of assets in next four years.
Also, voluntary retirement will be offered to employees to cut cost, he said.
He said BSNL and MTNL will be merged. Pending this, MTNL will act as a subsidiary of BSNL.
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