The proposed merger between two state-run telecom giants -- Bharat Sanchar Nigam Limited and Mahanagar Telephone Nigam Limited -- might have hit a roadblock, but both the companies plan to synergise their operations across the country.
In a written reply to the Rajya Sabha, Minister of State for IT and Communications Shakeel Ahmad said a consortium of consultants led by ICICI Securities has suggested some options for restructuring of MTNL and BSNL.
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The government said on Wednesday there will be no unbundling of BSNL and MTNL's fixed line networks for laying of broadband lines by private operators.
An apex committee under DoT Secretary R Chandraskehar has been set up to oversee the required policy decisions and institutional framework for an alliance between the two public sector undertakings which have been incurring losses.
Bharat Sanchar Nigam Limited on Monday expressed willingness to lower the 'carriage' charge, a move which will lead to lower STD call rates between Delhi and Mumbai to start with.
Mahanagar Telephone Nigam Limited may stand to lose two of its exclusive mobile service offerings -- seamless connectivity and free roaming with BSNL -- if it moves to other private players for carrying its STD traffic, saving a few billions.
Telecom public sector undertakings, BSNL and MTNL will start their broadband services across the country from Thursday, providing high-speed connectivity at tariffs ranging from Rs 500 to Rs 43,000.
The government on Wednesday said it has begun the process of scrutinising the names for appointment of advisors to synergise operations of the telecom PSUs -- BSNL and MTNL.
State-owned Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd on Tuesday announced a partial roll-back in telephone tariffs by increasing the number of free calls per month.
The department of telecommunications has agreed to set up a search committee to look for new chairmen and managing directors for both, as suggested by the Sam Pitroda-led committee on the organsiation's revamp.
The telecom ministry will decide on the merger between the state-owned telecom companies, Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd, only after the listing of the former.
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A merger between state-run telecom firms Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd is the best option because it would create the country's largest telecom company, said Kuldeep Goyal, chairman and managing director of BSNL.
The Department of Telecommunications is considering a proposal to allocate spectrum, the radio frequencies that enable wireless communications, for third-generation or 3G services to state-owned Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd ahead of other operators. The move is expected to frustrate private players since this will give BSNL and MTNL a head-start in rolling out high-value 3G services that offer video calls, music downloads and games.
Strengthening their presence in the international long distance telephony segment, state-run telecom companies BSNL and MTNL are likely to finalise the proposed joint venture company for setting up a submarine cable link before this fiscal.
The two PSUs have been losing revenues as well as market share.
Sam Pitroda said that the MTNL-BSNL merger is not the only solution and asked the government to give them more autonomy by lowering its stake to below 51 per cent.
The new chairmen-cum-managing directors of public sector telecom firms BSNL and MTNL will be hired on a contract basis with a fixed term of three years, as per the terms and conditions of their appointment, and they will be eligible for the same salary and perks as the head honchos of schedule-A PSUs.
Other members of the search panel are secretary (personnel) Shantanu Consul, telecom secretary P J Thomas, IIT Chennai professor Ashok Jhunjhunwala, IIM Ahmedabad professor Samir Baruha and IISC Bangalore professor N Balakrishnan.
Upon discovery of the price for 3G and Broadband Wireless Access spectrum, BSNL and MTNL recently paid Rs 18,500.38 crore (Rs 185 billion) and Rs 11,097.97 crore (Rs 110.97 billion), respectively, to the government.
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BSNL, MTNL to match cell phone tariff cuts
To revive the two state-run telecom operators, Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL), the government is likely to waive the one-time fee these telcos need to pay for retaining additional spectrum.
During financial year 2011-12, MTNL was able to use only 14.66 per cent of the Budget estimate, while BSNL reported a better performance, according to a report by the standing committee on information technology.
The Department of Telecommunications (DoT) has decided to allocate one block of 3G spectrum in each service area except Delhi and Mumbai to state-owned Bharat Sanchar Nigam Ltd (BSNL) at a price equivalent to the highest bid in the respective service areas.
The minister said the reasons for withdrawal of landline connections includes preference for mobile phones, move to private operator, disconnections due to non-payment of dues and surrendering of second telephone taken for get internet connection due to availability of broadband. The total number of landlines in the country as on March 2008 is 39 million, which was 4 crore in March 2007. At present, BSNL has 31 million landline users while MTNL has 3.68 million users.
At present, in BSNL and MTNL, there is no such proposal for reduction of landline call charges and mobile roaming charges, officials of both the companies said.
State-run telecom firms BSNL and MTNL have to recover a massive Rs 4,469 crore (Rs 44.69 billion) outstanding dues from states, centre, defence establishments and private subscribers, the Rajya Sabha was informed on Thursday.
Subscriber needs to pay Rs 19 for the service.
In one of the largest deals in West Asia, a consortium of Indian telecom firms led by Delhi-based Vavasi Group, which also hopes to rope in state-owned Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) and a Malaysian investor, will acquire a 46 per cent stake in Kuwaiti telecom company Zain for around $13.7 billion.MTNL and BSNL said they would like to clarify that no view has been taken regarding their participation in the consortium.
However, operators said the chief beneficiary would be the state-owned Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd, which have already been given the spectrum for 3G services, as well as Reliance Communications, which is still to roll out its 2G GSM network.
According to a senior company official, BSNL is in the process of appointing recovery agents on a commission basis to bring back the money.
Scheme likely to come into force by June or July this year; both PSUs have been losing revenues and market share.
The two PSUs, however, when contacted, said they are yet to receive any communication from the DoT and would decide once they receive such a demand.
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