New Delhi: The Union Cabinet on Wednesday announced the merger of state-owned telecom firms BSNL and MTNL and approved a Rs 68,751-crore revival package for loss-making, including 4G spectrum allocation and voluntary retirement scheme.
Telecom Minister Ravi Shankar Prasad said here that until the completion of the process, MTNL will operate as a subsidiary of BSNL.
The package includes raising of Rs 15,000 crore sovereign bonds to meet the immediate capital requirement of both the companies, 4G spectrum allocation worth Rs 20,140 crore, Rs 29,937 crore for VRS covering 50 per cent of their employees, and Rs 3,674 crore for goods and services tax that will be levied on allocation of radiowaves.
BSNL has around 1.68 lakh employees and MTNL around 22,000.
The total debt on both the companies stood at Rs 40,000 crore, of which half of the liability is on MTNL alone which operates in Delhi and Mumbai. Both the companies have been demanding spectrum to start 4G services to remain competitive in the market.
Telecom Secretary Anshu Prakash said the spectrum will be allocated to both the companies administratively within a month. Prakash added that the government will monetise MTNL and BSNL assets worth Rs 37,500 crore over a period of three years.