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BSNL-MTNL Merger: Department of Telecom weighing options

The telecom department (DoT) is considering either de-listing Mahanagar Telephone Nigam (MTNL) and then merging it into Bharat Sanchar Nigam (BSNL), or listing the latter and finalising a merger swap ratio based on the valuation of the two state-run telecom companies, with the first being the more likely option, top government officials told ET. Indications are that consultant KPMG may be involved in preparing the merger roadmap and also doing an independent thirdparty assessment of "employee mood in both MTNLand BSNL", especially since the merger proposal has been in limbo for three years amid resistance from unions, one of the persons quoted above said. KPMG did not reply to ET's queries on the issue. ET had recently reported on DoT's presentation to Prime Pinister Narendra Modi where the department had said it hoped to secure Cabinet approval for the merger of the two financially struggling state-run telcos by June next year. MTNL- listed in FY 1991-92 - runs telecom  in Delhi and Mumbai while BSNLoffers telecom coverage in the rest of the country. A possible delisting of MTNL in the run-up to a merger with BSNL may eventually be the favoured option as listing BSNL could prove to be a challenge, given the telco's poor financial status. "With accumulated losses upwards of Rs 30,000 crore, it may be tough to get a decent valuation for BSNL under current market conditions, which would impact any listing plans," said a third government official aware of the merger talks. But DoT's immediate challenge is dealing with MTNL's mammoth Rs 14,600 crore-plus debt, especially since struggling BSNL is averse to taking on MTNL's dues in its books, post-merger. MTNL had taken loans from several banks for buying 3G and broadband wireless access (BWA) spectrum four years ago. It is understood that DoT is weighing a host of options, including a possible restructuring of MTNL's debt by converting its loans into equity or even extending a soft loan to the merged entity. DoT is likely to take a call after it receives inputs from working groups comprising top BSNL and MTNL officials that are looking into business re-organisation, finance and regulatory issues. However, MTNL's debt is likely to see a partial dip to roughly Rs 11,000 crore (including interest component) later this year as it will shortly receive a Rs 4,534 -crore refund from DoT for its surrendered 4G airwaves. It has recently proposed to also surrender its CDMA airwaves in the 800 MHz band provided it receives an auction determined price. Senior officials at BSNL and MTNL do not foresee any major HR challenges to the proposed merger since the government has agreed to ring in parity in the pay scales of BSNL and MTNL employees. At present, MTNL employees get more than BSNL by being a navaratna public sector undertaking. Cabinet approval to pension payout to MTNL employees is also likely to reduce resistance to the proposed merger, said a top company official. In the immediate term, DoT is exploring ways to reduce tax payout of both the struggling telcos by persuading both companies to use their existing infrastructure-sharing pact for providing joint enterprise business solutions to companies. Under the pact, BSNL and MTNL share buildings, mobile masts and international long-distance phone networks to serve enterprise customers. However, a top MTNL official said, "Actual reduction in taxes payout would only come post-merger." DoT was solely responsible for running telecom services across India till 1985. In 1986, MTNL was carved out of the department to handle telecom services in Mumbai and Delhi. DoT's operations wing was corporatised and rechristened BSNL in September 2000. BSNL started operating telecom services across India, excluding Mumbai and Delhi circles, from October 1that year. At present, the government owns 56.25% of MTNL, and fully owns BSNL. DoT's plans to merge BSNL and MTNL come at a time when the Centre is exploring several ways to revive them. Both state-owned telcos continue to reel under huge losses.

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9.9.2014.  The MTNL Mazdoor Sangh has given a notice to the management for agitation on several long pending issues.  The management appealed to the union to call off the agitation. In a letter addressed to the General Secretary which is placed in the link circulars, the management has agreed to consider some of the issues and discuss with the union with regards to some other items. 


Shares of state-run telecom company Mahanagar Telephone Nigam Ltd ( MTNL  ) surged over 7 percent in trade today over reports that the Department of Telecom (DoT) has set a cut off date for the proposed merger between MTNL and Bharat Sanchar Nigam Ltd (BSNL). The DoT has set July 31, 2015 as the cut off date for the merger, which is a part of the Telecom Ministry’s plan to revive both the telecom companies. This development comes on the back of the two companies logging consecutive losses owing to tough competition from private players. At 13:38 hrs on 3.9.2014,  Mahanagar Telephone Nigam was quoting at Rs 32.10, up Rs 2.10, or 7.00 percent.


Price of MTNL shares surged in Mumbai stock exchange, following Ravi Shankar Prasad's announcement.

Hon'ble Minister of Communications, shri Ravi Shankar Prasad's statement on the revival of BSNL and MTNL has sent the right signal across the country. He has stated that the government would provide infrastructure support for the revival of BSNL and MTNL. As a result of this statement, the price of the shares of MTNL has surged in the Mumbai stock exchange. The price of MTNL shares, which was selling at Rs.33.85, increased by 7%. The statement of the Minister has given confidence to the public that MTNL will be revived. This has pushed the price of it's share in the market.


The General Secretary MTNL Mazdoor Sangh Shri Dharam Raj has led a delegation of MTNL office bearers to Shri Ravi Shankar Prasad, Hon'ble Minister for Communications and congratulated him. The Hon'ble Minister assured to call a meeting of the union's representtives for an in depth discussion over MTNL affairs.


The Government of India has issued Gazettee notification with regards to Pension for MTNL absorbed employeed. For details see link Orders.


The Unioon cabinet which met today has approved the pension scheme for MTNL employees at par with BSNL employees. Congratulations to all


FINALLY SOME GOOD NEWS TO THE BSNL AND MTNL EMPLOYEES. THE UNION CABINET WHICH MET TODAY HAS APPROVED FOR REFUND OF BB WIRELESS SPECTRUM CHARGES DUE TO BSNL AND MTNL.


FINALLY SOME GOOD NEWS TO THE BSNL AND MTNL EMPLOYEES. THE UNION CABINET WHICH MET TODAY HAS APPROVED FOR REFUND OF BB WIRELESS SPECTRUM CHARGES DUE TO BSNL AND MTNL.


THE IDA HAS INCREASED BY 5% W.E.F. 1.1.2014. THE TOTAL IDA DUE FROM 1.1.2014 WILL BE 90.5%.


25.12.2013. We deepply regret to intimate about the sudden demise of our beloved President Shri Giri Raj Sharma ji. He passed away at 20.00 hrs. We convey our heart felt sympathies to his family members.


The Notice for the Federal Council of Indian Telecom Employees Federation to be held on 21 and 22 November at Naik, Maharashtra is issued and is kept in the link CWC Meetings.


30.9.2013: The Consumer Price Index for Industrial Workers for the month of August 2013 increased by just 2 points as against the expected 4 points. The IDA increase with effect from 1st October 2013 will thus  be 6.6%, i.e., a total IDA of 85.5%.


25.9.2013: The Government of India has constituted the 7th Pay commission for Central Government employees.  The pay commission is actually due from 1.1.2016.  However, with an eye on the ensuing elections to Delhi State Assembly the Government might have taken this decision.  The commission is expected to submit its report before 1.1.2016


18.9.2013: The two representative unions in MTNL i.e. MTNL Mazdoor Sangh in Delhi and the MTNKS union representing MTNL Mumbai have entered into an agreement with the MTNL Management with regards to Pension issue at par with the BSNL employees. The agreeemnt was signed on 3.9.2013.  A section of the press has crried out a story line that over 30 unions have entered into an agreement with the management which is grosly inacurate.  Copy of the agreement is placed in the link Circulars.


12.9.13: THE GROUP OF MINISTERS ON REVIVAL OF BSNL AND MTNL MET IN NEW DELHI TODAY AND DECIDED AS FOLLOWS:

1. TO REFUND BB WIRELESS SPECTRUM AMOUNT SURRENDERED BY BSNL AND MTNL TO THE EXTENT OF RS.8300 CRORES TO BSNL AND 4600 CRORES TO MTNL.

2. TO SEND A NOTE TO THE CABINET REGARDING PAYMENT OF PENSION TO MTNL EMPLOYEES AT PAR WITH BSNL EMPLOYEES.

WITH THE ABOVE RECOMMENDATIONS TWO MAJOR ISSUES BEFORE THE GOM ARE RESOLVED.


12.9.13. The case filed by MTNL Mazdoor Sangh with regards to grant of additional IDA of 9.4% will come up for hearing on 12.9.13.


12.9.13. The process of selection of CMDs for MTNL and BSNL will be with DPE instead of the search committee.


12.9.13. The Group of Ministers on revival of MTNL and BSNL will meet on 12.9.13.


MTNL MAZDOOR SANGH WISHESS ALL A VERY HAPPY GANESH CHATURTHI


30.9.2013: The Federal Executive of the Indian Telecom Employees Federation and affiliate of the Bharatiya Mazdoor Sangh will take place at Nasik (Maharashtra) on 21 and 22 November 2013.


30.9.2013: The All India Conference of the Bharatiya Telecom Employees Union (BSNL) will be held at Nasik (Maharashtra) on 21 and 22 November 2013.


27.8.2013: The CHQ has filed a case in the Hon'ble CAT Delhi regarding  promotion from Work Assistant to TM Cadre in respect of those who qualified in the examination. The next hearing of the case is on 2.9.2013.


21.8.2013: The All India Conference of Puhlic Sector Employees National Confederation was held in Tahalgaon, Bihar and the list of Office bearers is kept in the link Circulars.


14.8.2013: MTNL Mazdoor Sangh wishess one and all a very happy and prosperous 66th INDEPENDENCE DAY.


7.8.2013: MTNL  has a good internet penetration in India while BSNL leads the market with highiest internet penetration in India. TRAI has revealed the data of top Internet service providers in India in the first quarter of 2013. BSNL continues to lead the Internet (broadband) service provider market with 60.74 percent share. The state-run BSNL has 13.12 million Internet subscribers at the end of March 2013, TRAI said. This telecom statistics does not include Internet accessed by mobile phones. The second largest player — Reliance Communications has 2.49 million Internet users followed by MTNL with 1.96 million internet users in India.


It is learnt that the GOM has agreed for payment of pension in MTNL by govt as in the case of  BSNL employees  with certain conditions like parity of pay scales with BSNL in next wage revision which is due  in  2017 and  difference of pension to be paid by MTNL.  The full details of the GOM decision are awaited.  This information is obtained from the media sources.


26.10.2012: MTNL MAZDOOR SANGH EXTENDS GREETINGS ON THE OCCASION OF BAKRID - Let the Festival bring Peace and JOY TO ONE AND ALL


23.7.2012 : 9.00 AM  TODAY IS THE FORMATION DAY OF THE BHARATIYA MAZDOOR SANGH. MTNL MS  EXTENDS FELICITATIONS TO ALL ITS MEMBERS ON THIS GREAT OCCASION.


Shri Virjesh Upadhyay, Secretary General ITEF, along with Shri Uday Patwardhan Vice President BMS will visit Geneva w.e.f. 26.5.2012 to 15.6.2012 to participate inthe ILO conference. MTNL MS wishess him a pleasent and purposefull stay.


MTNL MS EXTENDS WARM GREETINGS ON THE OCCASION OF SHRI RAM NAVAMI.  MAY LORD RAM SHOWER HIS BLESSINGS ON ALL OF YOU AND ON MTNL.


The BMS submitted a memorandum to the Govt conveying its views on the forthcoming Budget. For details see link CIRCULARS


DPE releases IDA orders. For details see link orders

A malacious and ficticious SMS has been floated by certain vested interests on 9.1.12 about possible reduction  in retirement age of employees and also about rejection of VRS by the Ministry of Finance. The General Secretary spoke to some senior officers in the  CO and also in the DOT and found that there is no substance to such message.  The DOT is yet to prepare the cabinet note on VRS.  Some people just to tarnish he image of the MTNL and to lower the morale of the employees are resorting to such cheap tactics. Let us not believe such words and instead put all our energies into making MTNL more vibrant.


AS PER THE MEMORANDUM OF UNDERSTANDING THE MTNL AND BSNL HAVE EARNED FAIR RATING FROM THE GOVERNMENT AND THE SCORE OF MTNL & BSNL  STOOD AT 3.836 & 3.963 respectively


There will be a one day general strike on 28.2.2012 by all the Central Trade Unions in the country.  The lead was taken by the BMS in the Massive rally held on 23.11.11 at New Delhi. 


The national executive meeting of the PSENC was held in MP on 29-30 October 2011 and urged the Government to terminate the 10 year wage agreement and enter into 5 year wage agreements immediately


UNITED FORUM OF MTNL UNIONS AND ASSOSIATIONS DECIDED TO HOLD DEMONSTRATION AT PARLIAMENT ON 9thNOV AND RALLY AT PM OFFICE ON 18th NOV.NON CO-OPRATION W.E.F.18th NOV ONWARD TILL SETTLEMENT OF PENSION ISSUE
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