The Indian Department of Telecommunications (DoT) is considering providing Rs30bn (US$666m) in annual subsidy to struggling state-owned telcos Banat Sanchar Nigam (BSNL) and Mahanagar Telephone Nigam (MTNL), reported the Indian newspaper Business…
The Indian Department of Telecommunications (DoT) is considering providing Rs30bn (US$666m) in annual subsidy to struggling state-owned telcos Banat Sanchar Nigam (BSNL) and Mahanagar Telephone Nigam (MTNL), reported the Indian newspaper Business Standard.
BSNL is expected to use the subsidy to support its operations in remote and rural regions while MTNL will cover higher pension and retirement payouts, according to the newspaper.
Citing DoT’s estimates, the Business Standard explained that BSNL is currently incurring a loss of about Rs25bn (US$555m) from its landline business, most of which concerns rural areas. In the meantime, MTNL’s pension amount is reportedly around Rs3.5bn (US$77m) annually.
This report comes just a few weeks after the DoT reportedly revived plans to merge BSNL and MTNL.
The merger plan was reportedly rejected three years ago by former telecom minister A. Raja, who is currently under investigation as part of the country’s 2G scam.
According to local reports, a draft strategic plan for the merger states that a merger should be allowed because the two companies have complimentary operations and can combine their strengths for synergies.
