Government to Monetize BSNL & MTNL Assets to Revive the Firms

The Indian government has acknowledged various assets of the state-owned telecom companies Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) and has announced its sale in FY22, according to top government official.

The asset monetization is part of the revival plan for BSNL and MTNL, which the Union cabinet approved in October 2019. The package included a voluntary retirement scheme (VRS) to slash employee cost and a merger of MTNL with BSNL, which has now been shelved due to the companies’ financial constraints.

Tuhin Kanta Pandey, secretary, department of investment and public asset management (Dipam) says, “There is a package that has been approved, which includes a number of things. There was VRS, money allocated to buy 4G spectrum and so on so forth. One of the considerations was they will raise money through monetization of BSNL and MTNL properties. There are several properties which have been identified and going forward, they will go for bidding."

Moreover, Tuhin states that the bidding process of these assets would not be completed in the next fiscal as number of properties is pretty huge. Proceeds from the sale of the assets would help the government to raise the fund to turn around the two money-losing firms.

Tuhin further adds, “I don’t think we will be able to complete the bidding in FY22 because there are a large number of properties, but there will be a substantial number of assets which will be brought to bidding."

The merger and revival plan that is approximated to be Rs.69, 000 crore, which includes capital infusion of Rs.20,140 crore by the Centre to meet the cost of spectrum for BSNL’s 4G rollout. Also, the government has accepted to bear the GST amount of Rs.3, 674 crore on the overall spectrum cost. Hence, the assets worth Rs.38, 000 crore would be monetized in four years.