The question of merger of the two telecom PSUs, BSNL and MTNL, is coming up now and then. Is it possible? What are the real issues?
MTNL was formed on 1st April 1986 as a wholly government company under Department of Telecommunications (DOT), to provide telecom services, except telegraphs, in the metros of Delhi and Mumbai. BSNL was formed on 1st October 2000 as government company as MTNL, but to provide telecom services all over India except in the above two metro cities and the telegraphs including in the metros.
What was the necessity to break the DOT services in to two corporations, instead of continuing as a government department which was well appreciated as an efficient and reliable service?
The government has adopted the neo-liberalisation process since the 1990s. Instead of strengthening the Public Sectors which were called as ‘Temples of modern India’ by the first Prime Minister Pandit Jawaharlal Nehru, the present ruling classes wanted to disinvest and sell the PSUs at cheap prices to the corporates. Their slogan was, ‘Business is not the business of the government’. It is not easy to privatise the government department directly and hence corporatisation, which is considered as the first step towards privatisation. How another corporation formed from DOT vis. Videsh Sanchar Nigam Limited (VSNL) was sold to the Tatas is well known. In the same way, the government wants to privatise both MTNL and BSNL. MTNL is already disinvested to the extent of 45%, but due to strong resistance from the unions, no disinvestment has taken place in BSNL.
Both the PSUs were in profit earlier, but is in loss at present due to the pro-private, anti-PSU policy of the government. DOT services should not have been corporatized and at least not bifurcated in to MTNL and BSNL.
Interestingly, years after formation of these two companies, some proposals from the government had come for merger of the two. The employees are in support. Merger will help synergy and benefit the operations on an all India basis.
But there are two issues to be sorted out. One is about wages, perks, promotion, seniority, pension etc. These are different in these two companies. How it can be solved? We have the tragic experience of the merger of Air India and Indian Airlines which has resulted in much heartburning and agitations due to the injustice meted out to one or other section after merger. There are about 2.74 lakh workers in BSNL and about 35,000 in MTNL. These issues have to be sorted out before merger.
Another issue is that MTNL is disinvested and BSNL is not. How this issue can dealt with on merger. One way is to buy back the shares sold by MTNL and then merge. But this is almost an impossibility with the privatisation policy of the government.
Under the circumstances, the chance for any merger between the two telecom PSUs is dim. But another decision can be taken by the government. BSNL can be allowed to provide services in Mumbai and Delhi and in the same way MTNL allowed to function outside Delhi and Mumbai . The Oil PSUs are not restricted to any areas, but is on all India basis. Why that position can’t be introduced in telecom also. That will benefit both the companies.
VAN Namboodiri's Blog 
Dear Comrade, the issue of MTNL & BSNL merger came when dayanidhi maran was the MOC, but failed after 2G Raja took over, as read from your article the merger seems to be complicated and not possible. BSNL may be allowed to operate in Mumbai and Delhi as most corporate offices are located in these cities and branch offices in other parts of the city. Comrade the issue be taken with BSNL HQ and with DOT. Once BSNL comes in operation in Delhi & Mumbai will see huge connections coming to BSNL as the customers are eager to get BSNL connections there. let MTNL & BSNL compete among all the circles. This issue will work for the betterment of both BSNL and MTNL.
Merger of these both PSU are. in the intrest of Aam Aadmi as well as it benefit to the entire nation.
Thanking you,
M.khandagle
sir,
Merger of Indian airlines was very bad but here is second example of PRASR BHARATI BOARD AND DOORDARSHAN AS WELLAS STAFF OF aLL INDIA RADIO ,THEY ARE GETTING ALL BENEFIT AND SONE 1200 NEW POSTS ARE SANCTIONED FRO SAMOOTH WORKING OF a.i.r.and doordarshan.so MTNL AND BSNL MERGER ALONGWITH ITI LTD,C-DOT AND TELECOM FACTRIES WOULD BE POSSIBLE IN NEAR FUTURE .MANAGEMENT AND CENTRAL UNIONS MAY THINK AND WORK POSITIVELY IN THIS MATTER.
THANKING YOU SIR,
M.KHANDAGLE
BSNL,GMTD,
INDORE
(mp)