Government may merge these government telecom companies

Business
Sep 10 2019 11:57 PM
Vinod Rathore

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New Delhi: The central government has now become fully active in the economic sector. The government is taking action on the losses incurred on all public sector companies. In the same sequence, after the announcement of merger of banks, the government can take such a decision regarding loss-making telecom companies. The government may soon decide on the merger of the capital of the struggling BSNL and MTNL. Earlier, the Union Cabinet would issue 4G spectrum licenses to both the companies.

The grant of 4G spectrum to both telecom companies may be approved in the Union Cabinet meeting this month. Legal advice has already been taken from the Solicitor General on this and the matter has been referred to the administrative unit. The cabinet was required to take this clearance before taking a decision. Despite not participating in the spectrum auction, BSNL and MTNL have bid the highest and have acquired the spectrum.

After this, the Department of Telecommunications will issue notifications regarding the merger on the fund. The funds of the two companies will be exchanged as bonds. This time the government will bear the entire cost of providing 4G spectrum to BSNL and MTNL. Under the earlier agreement, the government would have imposed 50 per cent capital and the remaining 50 per cent would have to be invested by both companies. But considering the financial condition of the company, the government has decided to take this step. Significantly, these companies are not able to pay their employees even on time.