The government on Wednesday, October 23, 2019, proposed a plan to merge Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Limited (MTNL). The government thrashed the rumours of shutdown saying that both BSNL and MTNL will not be closed or divested. The decision to amalgamate BSNL and MTNL has been taken possibly in a move to revive both the state-run enterprises. The state-owned telecom majors BSNL and MTNL have been reeling under heavy losses.

MTNL to be merged with BSNL for the revival of state-owned telecom firms, said Union Telecom Minister Ravi Shankar Prasad. The government is aiming for Rs 38,000 crore asset monetisation programme, issuance of Rs 15,000 crore sovereign bonds and implementing a voluntary retirement scheme (VRS) for employees of BSNL and MTNL. The merger plan has been taken by the Cabinet chaired by Prime Minister Narendra Modi.

"We are going to merge MTNL with BSNL. Since MTNL is a listed company with shares the merger will take time. Till then MTNL will act as a subsidiary of BSNL," Prasad said. The voluntary retirement scheme will be implemented in the enterprise to reduce the overall cost of the company.

Telecom Minister Prasad has informed that the government, along with the other requisite measures, will be infusing an amount of Rs 29,937 crore for revival of the BSNL and MTNL. The revival package of Rs 15,000 crore through the issuance of sovereign bonds and Rs 38,000 via asset monetisation will be done in the next four years.

The Department of Telecommunications (DoT) will be sending a proposal to the Cabinet for the revival plan for BSNL and MTNL including designated monetary support for acquiring 4G spectrum.