BSNL-MTNL

Category: Government | No Comments | Posted on December 25, 2005

The government is reconsidering the issue of merger between BSNL and MTNL on the basis of suggestions made by a financial consultant appointed by the Centre.

Since BSNL and MTNL had been owned by the government, a need was felt that merger between the two would give more operational synergy. While BSNL is fully owned by the government, MTNL is a listed company. Capital structure of both the companies are different.

Facts and figures on BSNL from its Chairman and MD, AK Sinha:

BSNL has a mobile subscriber base of 14 million nationally and the target is to increase it to 25 million by March 2006.

It is aiming to achieve a turnover of Rs 38,000 crore in the current financial year, higher by Rs 2,000 crore over the last fiscal.

In the year of 2004-05, BSNL invested Rs 2,269 crore in rural telephony, of which Rs 1,415 crore were invested in the Northeast states, Jammu and Kashmir, and Uttaranchal.

The rate of surrender of fixed line connections was higher than the number of new lines given. However, there is demand for fixed line phones in the rural areas. The revenue per fixed line for the company was falling, but is compensated by the growth in mobile and broadband services. BSNL was also earning revenue from inter-connect charges and selling enterprise solutions.

The company has slammed the finance ministry’s recommendations that all government departments, ministries and officials be permitted to use the services of all private telecom operators.

Sinha said, “While on one hand BSNL has been used as a tool for implementing socially desirable but commercially non-feasible initiatives by the government, on the other, it has been denied the status of preferred service provider for the government sector.”

While highlighting that BSNL was a 100 per cent government-owned company, Sinha also pointed out that “all private telecom operators followed a policy of using their own telecom services for all communication across their various units”.

Meanwhile, the staff of BSNL is planning to go on a nationwide strike on January 5, 2006 in protest against the government’s decision to allow 74% FDI in the telecom sector and against divestment of BSNL and state-level Mahanagar Telephone Nigam Ltd (MTNL). The employees of the public sector giant are demand ing a Navaratna status for BSNL.

“We are the biggest PSU with an authorised capital of Rs 10,000 crore and with a paid up capital of Rs 5,000 crore. The organisation has been consistently making profits for the last five years and also paid a dividend of Rs 975 crore last year,” he said.

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