No plan to merge BSNL with MTNL, to go ahead with outsourcing maintenance

Telecom minister Manoj Sinha today said that the government has ‘no plans’ to merge state-owned telecom service providers Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd.

Sinha also said that BSNL is going ahead with the outsourcing of operations and maintenance activities of 26,287 towers across the country to third parties.

“At present, there is no proposal for merger of BSNL and MTNL,” the minister told the Parliament today.

The clarification assumes significance, especially for employees of MTNL, as the company is in a far worse financial situation compared to BSNL, which is slightly better off, but getting worse.

Some politicians related to the ruling National Democratic Alliance had promised MTNL employees that the new government will look at merging the two companies to save both of them.

Two months ago, a parliamentary committee too had weighed in favor of the merger, claiming that it would make them stronger in their fight with private sector players.

However, MTNL, despite being a small company, has far higher levels of debt compared to BSNL; enough to threaten the financial viability of the combined entity.


Sinha also said that BSNL has decided to go ahead with outsourcing operation and maintenance (O&M) activities at 26,287 base stations in the country.

“BSNL has floated a tender for outsourcing of Operations & Maintenance (O&M) activities of passive infra (non electronic infrastructure at mobile tower sites) along with Sales & Marketing (S&M) work” at these towers, it said.

This has been done for “operational and financial reasons”, he added.

The company has lost much of its employee strength and has hardly been recruiting new talent in recent years to cut costs.

BSNL’s financial condition has deteriorated in the face of relentless competition from private sector players.

The company, which got 4G spectrum seven years ago, is yet to launch 4G services, even as many of its rivals have achieved 60%-90% population coverage for their LTE networks.

BSNL was supposed to have started its 4G services from Kerala last month, but there has been no update on the matter either.

Sinha also said BSNL employees are not opposed to the decision to outsource O&M activities at these tower sites.

“BSNL has informed that its Employee Unions so far have not opposed the aforesaid outsourcing arrangement,” he added.