India looks at BSNL and MTNL merger

By:
Alan Burkitt-Gray
Published on:

The Indian Department of Telecom is looking at merging its two state-owned fixed and mobile operators, both of which are loss-making

The Indian government is looking at a plan to merge its two loss-making state-owned operators, BSNL and MTNL, according to a well-sourced report in the Indian business press.

The Business Standard says it has a source in the Department of Telecom who has told it the topic was the focus of a meeting in February.

BSNL and MTNL are facing financial stress because of increasing completion in Indian telecoms – a feature that has caused many of the country’s private-sector operators to plan mergers. The two companies have only a 9% market share in India’s mobile market, according to the regulator.

MTNL operates mobile networks in the large metropolitan areas of Delhi and Mumbai as well as some other parts of the country. The Business Standard says that, as an alternative to a straight merger, BSNL could acquire MTNL’s Delhi and Mumbai business. Alternatively, BSNL is keen on picking up mobile operations of MTNL in Gurgaon, Noida and Faridabad, where it is already offering landline and broadband services, says the newspaper.

MTNL makes a huge loss – with its loss in the last quarter of 2016 exceeding income by 19%. BSNL is also loss-making but the loss is falling.