MTNL's Difference In Pay Scales, Debt Impede Merger, Says BSNL Head

The state-run telco has inked a pact with Softbank to co-work on interest areas.

Mumbai: Bharat Sanchar Nigam (BSNL) feels a merger with MTNL will be positive for both the companies,but there are a few impediments like the later's huge debt and the difference between pay scales which need to be sorted out, a top official has said. However, there is no specific plan on the merger in the works at present, beyond the appointment of a consultant by the government.

The state-run telco has inked a pact with Softbank to co-work on "interest areas" and is also in talks with the Japanese telecom company's investee company Paytm for a tie-up, the official said. "Merger between the two (MTNL and BSNL) is going to begood for both the companies. Lets take the argument that itis going to be good, but there are various issues that need to be sorted out," its chairman and managing director Anupam Shrivastava told PTI recently. The impediments include MTNLs debt of over Rs 16,000 crore as of December 2017 and the difference between the pays scales for employees of both the companies, he said.

Another difficult factor will be MTNL being a widely-owned listed entity, he added. In the comments that come after telecom minister Manoj Sinha has denied any plan to merge the two state-run loss making telcos, Shrivastava said there is no specific plan in the works. "Not at this point of time. The government has appointed a consultant to frame the timeline and road map for the merger of BSNL and MTNL," he said, when asked if there isa plan to merge the two. The CMD, however, declined to elaborate both on the tie-up with Softbank and proposed joining hands with payments bank Paytm. "At this point of time, an agreement has been signed(with Softbank) and we are working on various interest areas...Lets see what happens," he said, making it clear that it does not involve equity changing hands.

He said while the company, which has a reach into allthe corners of the country, has no plans to venture into thepayments bank space as has been done by many other telcos,he said. BSNL has launched a mobile wallet in association withlargest lender SBI and will be working to promote that aswell, he said. He said FY19 will be a year of transition, where ithopes to increase revenue on greater volumes and expandingmarket share, even as it continues to shed average revenue peruser (ARPUs). After the arrival of the deep-pocketed Reliance Jio,BSNL has actually seen its market share increase and hopes tocontinue this, he said. The state-run player wants to take competition"head-on" and is working on a strategy that involves "meetingtariff by tariff," Shrivastava said.

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