Govt may opt to sell BSNL and MTNL, say reports
29 October 2019
The government is reported to have developed second thoughts on the proposed plan to invest huge amounts to revive state-run telecom firms - Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) - and instead is now looking at divesting its stake in the two telcos.
North Bloc may now aggressively follow a policy of disinvestment, including strategic disinvestment, after Diwali, reports citing official sources said.
The Prime Minister’s Office had stayed the divestment of BSNL and MTNL partly on political grounds and partly on advice by the bureaucracy that a state-run telecom entity is required, especially for sensitive areas. The PMO, however, has advised the ministry to go in for strategic sales to private sector bidders, say reports.
Earlier reports had also suggested that with the Supreme Court allowing the government’s revenue share claims amounting toRs92,000 crore on private telecom firms, the revival of BSNL and MTNL would be on track as the government would have the needed funds.
It now seems the government would make money both from the revenue share of private telcos and the divestment proceeds of BSNL and MTNL and use the funds to reduce its revenue deficit.
The government would rather opt to make money despite strong objections from employees of the two state-run telecom firms, including from BJP’s labour wing, Bharatiya Mazdoor Sangh, to the disinvestment.
There has also been a growing concern that the neglect of BSNL that plays a vital part in connectivity in remote states and large stretches of rural areas would seriously hurt the government’s connectivity plans.
Officials also said that unlike in the past when the government sold one PSU to another PSU to fulfil disinvestment targets, this time, however, would opt “rather to go in for strategic sales where domestic and international bidders can be encouraged to participate.”
The government has already lined up national carrier Air India, two public sector oil companies — BPCL and HPCL – for divestment.
Air India is likely to be the first big strategic disinvestment to be effected next month itself. The government is selling 100 per cent stake in the airline besides offering a host of concessions, including write off of a large portion of its debt, to make the airline an attractive buy.
The two public sector oil companies — BPCL and HPCL — which were nationalised in the 1970s are also likely to be sold off to a strategic buyer within this financial year.