Parliamentary panel proposes MTNL and BSNL merger
Bhagyashree Vivarekar / 17 Mar 2017
The Committee believes that the merger would give both the entities a chance to compete against private sector players.Both public sector firms are facing financial losses and revenue decline due to loss of market share and increasing expenditure.
The Committee believes that the merger would give both the entities a chance to compete against private sector players. Further, the synergies and advantages inherent in an integrated national telecom infrastructure would pave the way for lower cost of investment and greater combined ability to face competition.
Both public sector firms are facing financial losses and revenue decline due to loss of market share and increasing expenditure. Also, the PSUs have not been able to invest adequately in the expansion and modernisation of their network, leading to coverage issues, the Department of Telecom (DoT) informed the committee.
MTNL has been unable to upgrade its GSM and landline network for the last three-four years due to restraint of funds.
India’s major indices are touching record high while the telecom sector is going through consolidation phase. As major incumbents are also taking route of merger and acquisition such as, Idea-Vodafone merger deal, Reliance Communication-Aircel merger and recent acquisition of Telenor India by Bharti Airtel. Such tremors in the telecom sector occured as an instant effect after Reliance's foray into telecom sector with Jio.
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