DoT Proposes BSNL, MTNL Merger

News: The Indian Department of Telecom (DoT) has proposed plans to merge state-owned and loss-making telecoms operators Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) into a single entity. Additionally, the department has recommended a retirement scheme for 100,000 BSNL employees and 20,000 MTNL employees, aimed at lowering costs. The future of the two operators is currently being studied by a group of government ministers. The merger was mulled a few years back; however, the plan was abandoned due to political reasons and concerns related to huge job cuts.

BMI View: The Indian telecoms market has experienced a considerable number of challenges in the last few years owing to constant regulatory disputes and a hostile business environment, which includes an aggressive price war that has eroded operators' profitability. Despite the country's significant growth potential, the industry is struggling to capitalise on the opportunities, which will remain the central theme in the near future as we do not expect the market to reach a swift resolution of the complicated issues.

This article is tagged to:
Sector: Telecommunications
Geography: India

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