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Committee suggests BSNL-MTNL merger. It won’t help

The Parliamentary committee on petitions yesterday tabled its report in the Lok Sabha, recommending a merger of BSNL and MTNL, while also adding that mere financial support from the government won't work, saying that the "aspect of providing financial support to these entities by the Government has proved to be an apparatus for 'survival' and not 'revival'." One reasoning from the committee which we couldn't quite understand: "with the two entities competing against each other as well as the private sector players - their value attrition would only accelerate." This doesn't make sense because MTNL operates only in Delhi and Mumbai, while BSNL operates in all other circles. Thus the two do not compete with other. Still, that doesn't mean that the merger isn't a bad idea: it should lead to a reduction in management overheads. This recommendation of a merger is based on information provided by BSNL and MTNL for the period up to 2015. That means, given the shake-up in the telecom sector because of Reliance Jio, the numbers are likely to be much worse. Too little too late? The report cites the following reasons for the recommendations: 1. Decline in marketshare: - BSNL's wireline marketshare declined to 59.31% from 65.54% between December 2013 and 2015. - BSNL's Wireless marketshare declined to 7.96% by December 2015. For the same period, MTNL's wireless marketshare declined to 0.36% from 0.58%. - BSNL's wireline broadband services marketshare declined to 15.67% in December 2015 from 29.96% in December 2013. For the same period, MTNL's broadband marketshare…

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Written By

Founder @ MediaNama. TED Fellow. Asia21 Fellow @ Asia Society. Co-founder SaveTheInternet.in and Internet Freedom Foundation. Advisory board @ CyberBRICS

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