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The Silicon Review Asia

MTNL and BSNL is all set to be revamped by the Government of India

MTNL and BSNL is all set to be revamped by the Government of India

Recently the Indian government made it clear that it would not disinvest in telecom companies run by the state; instead, the government wants to revive them by investing in it. Rs 70,000 crore package has been approved by the cabinet committee to revive BSNL and MTNL. Both the companies are expected to be merged, and a VRS initiative is expected to be announced to retrench the employees. The allotted amount for the recovery process is higher than the Health Ministry in the Union budget. According to the government’s rescue plan, assets will be sold in order to raise funds, and sovereign bonds will be issued.

The government wants to rescue state-run telecos because they provide services in almost every part of the country, and moreover, private companies are profit-driven, so they might not set up infrastructure in areas where there are no business opportunities. Real estate assets worth Rs 37,000 crore will be monetized, and the fund will be used to clear the debts. Networks will be upgraded, and employees will be given VRS to reduce the employee count by 50 percent. The idea of upgrading is to make the network more competitive, and the 4G spectrum is also being allotted for both the companies.

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