BSNL-MTNL merger plan to be placed before Cabinet by June

Experts says merger of PSU like Air India and Indian Airlines has not been a happy experience

The Department of Telecom is planning to place merger proposal of loss-making public sector firms BSNL and MTNL before the Cabinet by June, according to a parliamentary panel report.

"On the plan for merger of BSNL and MTNL, the same would taken to Cabinet before June," the Standing Committee on Information Technology chaired by BJP MP Anurag Thakur said in its report.

The former telecom secretary J S Deepak has informed the panel that the Department of Telecom is working on a plan but "would not say that we have a plan of integrating these two companies in phases".

Deepak said that merger of PSU like Air India and Indian Airlines has not been a happy experience.

"...But we realised that there would be some synergy in merger. We may have to do it in stages and we are working to develop a plan. I would want to take it to Cabinet before the end of June," he said.

Deepak was last month shifted with "immediate effect" from the telecom ministry and made officer on special duty in the commerce department.

The panel was informed that both the state-run telecom firms are dogged by various issues like poor quality service, lack of investment, continuous loss and MTNL is even borrowing money to meet its day to day expenses.

Deepak informed the panel that there are 3 lakh employees without required skill in BSNL and MTNL that incur liability of Rs 1,000 crore per month wage bills.

The panel recommended to the DoT that it should look into possibility of skilling the unskilled employees and should come out with a revised VRS proposal for those who cannot be skilled.

"With regard to merger of BSNL and MTNL , the Committee recommends that the case of merger of Air India and Indian Airlines should be carefully examined while developing a merger plan and the same should be implemented with the objective to make them strong," the panel said.