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MTNL ‘not aware’ of potential merger deal with BSNL

State-owned telco MTNL said that it was “not aware” of discussions to merge operations with BSNL, as reported by PTI on Tuesday. In a reply to the stock exchanges, MTNL said that “we are not aware of any such news…as and when such directions/proposal comes from the administrative of MTNL, we will inform the stock exchanges accordingly”. Note that the government earlier evaluated options to merge both BSNL and MTNL into a single unit in 2015, but the deal never fell through.

On Tuesday, a PTI report said that officials from the Department of Telecommunications (DoT) conducted a top-level meeting to discuss a potential merger deal involving BSNL and MTNL. An unidentified source speaking to the publication said that officials were looking at merging MTNL’s landline and broadband operations in Gurgaon, Noida, and Faridabad, as well as in Delhi and Mumbai.

The report added that the meeting was headed by former telecom secretary J.S Deepak a few weeks ago. Top officials at DoT were looking at a possible merger deal due to MTNL’s growing losses and liabilities, and due to growing competition in the industry. For the quarter ended December 31st, 2016 (Q3FY17), MTNL reported losses of Rs 819.96 crore, which widened from Rs 749.32 crore in Q2FY17.  Since Q1 FY15, only once has MTNL posted a profit of Rs 174.58 crore in Q4 FY16, which came from the company surrendering 800 MHz of CDMA spectrum for a total amount of Rs 428.95 crore.

BSNL, on the other hand, posted losses of Rs 1,721 crore during the first half of 2016 (FY17). Comparatively, in the preceding financial year (FY16), it posted a net loss of Rs 3,880 core. The government-owned telco recently inked deals with Nokia for developing in 5G and IoT networks in the future, although it has not even launched 4G operations in any circle.

MTNL might sell assets boost revenue

Last month, the Ministry of Communications informed the Lok Sabha that MTNL is “exploring the monetization of its assets which may contribute to its revenue”. It was also looking to create a “managed service model (in partnership) with BSNL for its mobile network.” The telco is also in process of expanding its GSM/3G network in Delhi circle, which will help handle additional mobile traffic. It is also upgrading its 3G network in Mumbai to HSPA+, which is an enhanced version of the 3G standard.

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