Speculations on BSNL MTNL merger rife

Amidst major mergers, speculations about the merger of the major PSUs, BSNL and MTNL are also rife, as the Telecom department reportedly plans to put forth the proposal for a merger before the Cabinet. The merger is likely to strengthen the pan India presence of the telecom majors, besides equipping it for the fierce competition in the industry. Mahanagar Telephone Nigam (MTNL) provides telecom services in Delhi and Mumbai, while Bharat Sanchar Nigam (BSNL) operates across India.

In case of a merger, the companies will have to correspond their payscale and salary structure, besides settling their debt issues. MTNL's total debt reached a whopping sum of Rs 19,418.23 crore by December 31, 2016, even as the company reported an annual revenue of Rs 3,197.41 crore in FY16 and a net loss of Rs 2,005.72 crore.

While BSNL's losses reduced to Rs 4,890 crore in 9MFY17 in comparison with a loss of Rs 6,121 in the same period in the previous year. Moreover the company also reported an increase of 5.8 per cent in revenue from services at Rs 19,376.6 crore in the same period.

BSNL and MTNL constitute 9 per cent of the total wireless subscriber base of 1.12 billion across India. At 12:04 hrs, MTNL was trading at Rs 27.30, up by 5.20 per cent on the BSE as on April 17, 2017.