(Last Updated On: October 1, 2014)

PM Narendra Modi has now decided to not merge the PSU telcos- BSNL and MTNL, in a major roll back of decisions taken by the previous NDA government.

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The previous government was considering to merge the two companies for reviving them out of their losses. But, the current PM has another plans. According to a rough estimate by the sources, the government would need to something between Rs. 5,000 crore to Rs. 8,000 crore if it buys out BSNL’s OFC (optical fibre cable) network.

Out of the total 9 lakh km+ of fibre network, BSNL owns 7 lakh km. This amout received by total buyout of its OFC network will give the company enough funds to neutralize its losses and focus on its core business of telephony- fixed and wireless.

The government would then be able to utilize this OFC network for an early rollout of its ‘Digital India Program‘. This ambitious program aims to link 20 lakh village panchayats with the rest of the country with high-speed internet.

To make this a reality the government needs to layout OFC network for about 18 lakh to 20 lakh kms in the country. So, buying BSNL’s OFC network would be great headstart.

It is interesting to note that the government had recently set a deadline for the merger by mid next year, but this upturn on the merger process by the PM himself will affect the planning to the companies badly. We don’t exactly the reason behing this rollback for the merger but it better be for the greater good.

What do you think about it?

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