A delayed imperative: On BSNL-MTNL merger

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A delayed imperative: On BSNL-MTNL merger

The move to revive BSNL and MTNL and merge them comes at a crucial time for the industry
The Cabinet’s approval this week for a plan to revive(पुनर्जीवित) the loss-making public sector telecommunications(दूरसंचार ) providers(प्रदाता) Bharat Sanchar Nigam Ltd. (BSNL) and Mahanagar Telephone Nigam Ltd. (MTNL) has come not a moment too soon. From having been monopoly(एकाधिकार) providers of telephone connectivity, the state-run telcos have had to contend(संघर्ष करना/बहस करना) with sweeping change since the opening up of the industry to private players and entry of wireless telephony in the 1990s. In just over two decades, the mobile phone revolution(क्रांति/चक्कर ) has catapulted India to the second rank in terms of wireless subscribers, with only China ahead. But the radical (आमूल )transformation(परिवर्तन of the industry landscape — wrought by the runaway growth in user numbers, rapid technological advances, and bruising (जोरदार )competition — has come at a substantial(पर्याप्त ) price. The private sector saw the relatively(अपेक्षाकृत ) older, large firms using mergers and acquisitions(अधिग्रहण) to consolidate(समेकित ) as smaller rivals(प्रतिद्वंद्वियों ) found themselves unable to cope with bitter(कड़वा/द्वेषपूर्ण) tariff wars and the capital costs of bidding(बोली लगाना) for spectrum(वर्णक्रम) and upgrading their technologies. BSNL, for its part, was saddled with the legacy of having been a large-scale provider of jobs as well as state-mandated connectivity to remote corners of the country. It is in the fulfilment(पूर्ति) of the state’s social objectives(उद्देश्यों) that the public sector enterprises (PSEs) racked up substantial costs, which the Centre’s revival plan aims to help address.

The proposal(प्रस्ताव ) includes(शामिल ) the allotment(आवंटन/नियतन) of critical(नाजुक/संकटमय) spectrum to the two PSEs for offering fourth-generation wireless services, including broadband. The Centre will fund the spectrum’s cost through an infusion of ₹20,140 crore of capital while also bearing the related GST levy of ₹3,674 crore. And besides providing a sovereign guarantee on ₹15,000 crore of long-term bonds, which would help the firms restructure(पुनर्गठन) debt and partly fund expenses(खर्च/लागत), the government will extend budgetary support of ₹17,169 crore for ex-gratia payments on a crucial(महत्वपूर्ण ) voluntary(स्वैच्छिक) retirement scheme. A lot will hinge on this VRS plan given that BSNL’s workforce of over 1,65,000 employees end up cornering about 75% of the telco’s total income. The Cabinet has also given an ‘in-principle’ nod for the two PSEs to merge, a move that would add market heft to the merged entity. A successful revival of BSNL will have far-reaching implications(उलझाव/निहितार्थ) for the industry, this at a time when two of the three surviving private players are faced with not only sliding market share but a government bill of about ₹75,000 crore following the loss of a legal challenge. The reach of its network, especially in remote parts, makes BSNL a “strategic(रणनीतिक ) assetसंपत्ति” that has national security implications given its role in serving the armed forces and responding to natural disasters(आपदा). The revival plan, even if years late, is a clear recognition(मान्यता) by the government of this indisputable(निर्विवाद .) fact(तथ्य).

 

Important Vocabulary

1. Acquisitions(अधिग्रहण
Synonyms: addition, gain, procurement, purchase, recovery
Antonyms: loss, failure, forfeit, surrender, dearth

2. Critical(नाजुक/संकटमय)
Synonyms: demanding, analytical, belittling, biting, calumniatory
Antonyms: complimentary, laudatory, praising, trivial , uncritical

3. Crucial(महत्वपूर्ण )
Synonyms: central, compelling, deciding, decisive, essential
Antonyms: inessential, insignificant, minor, optional, secondary

4. Disasters(आपदा)
Synonyms: calamity, catastrophe, collapse, crash, debacle
Antonyms: achievement, advantage, attainment, benefit, blessing

5. Indisputable(निर्विवाद .
Synonyms: absolute, evident, irrefutable, unassailable, undeniable
Antonyms: disputable, doubtful, indefinite, questionable, uncertain

6. Monopoly(एकाधिकार)
Synonyms: cartel, holding, ownership, patent, trust
Antonyms: distribution, joint-ownership, scattering, sharing

7. Radical (आमूल )
Synonyms: agitator, anarchist, extremist, fanatic
Antonyms: conservative, moderate

8. Relatively(अपेक्षाकृत )
Synonyms: almost, approximately, comparably, comparatively, nearly

9. Revolution(क्रांति/चक्कर )
Synonyms: coup, innovation, insurgency, mutiny, rebellion
Antonyms: calm, harmony, peace, stagnation, calmness

10. Rivals(प्रतिद्वंद्वियों
Synonyms: adversary, challenger, competition, competitor, contender
Antonyms: ally, helper, difference, associate, cohort

11. Recognition(मान्यता
Synonyms: acceptance, admission, appreciation, awareness, concession
Antonyms: denial, disagreement, disbelief, refusal, repudiation

Credit To The Hindu News Paper

The move to revive BSNL and MTNL and merge them comes at a crucial time for the industry
The Cabinet’s approval this week for a plan to revive the loss-making public sector telecommunications providers Bharat Sanchar Nigam Ltd. (BSNL) and Mahanagar Telephone Nigam Ltd. (MTNL) has come not a moment too soon. From having been monopoly providers of telephone connectivity, the state-run telcos have had to contend with sweeping change since the opening up of the industry to private players and entry of wireless telephony in the 1990s. In just over two decades, the mobile phone revolution has catapulted India to the second rank in terms of wireless subscribers, with only China ahead. But the radical transformation of the industry landscape — wrought by the runaway growth in user numbers, rapid technological advances, and bruising competition — has come at a substantial price. The private sector saw the relatively older, large firms using mergers and acquisitions to consolidate as smaller rivals found themselves unable to cope with bitter tariff wars and the capital costs of bidding for spectrum and upgrading their technologies. BSNL, for its part, was saddled with the legacy of having been a large-scale provider of jobs as well as state-mandated connectivity to remote corners of the country. It is in the fulfilment of the state’s social objectives that the public sector enterprises (PSEs) racked up substantial costs, which the Centre’s revival plan aims to help address.

The proposal includes the allotment of critical spectrum to the two PSEs for offering fourth-generation wireless services, including broadband. The Centre will fund the spectrum’s cost through an infusion of ₹20,140 crore of capital while also bearing the related GST levy of ₹3,674 crore. And besides providing a sovereign guarantee on ₹15,000 crore of long-term bonds, which would help the firms restructure debt and partly fund expenses, the government will extend budgetary support of ₹17,169 crore for ex-gratia payments on a crucial voluntary retirement scheme. A lot will hinge on this VRS plan given that BSNL’s workforce of over 1,65,000 employees end up cornering about 75% of the telco’s total income. The Cabinet has also given an ‘in-principle’ nod for the two PSEs to merge, a move that would add market heft to the merged entity. A successful revival of BSNL will have far-reaching implications for the industry, this at a time when two of the three surviving private players are faced with not only sliding market share but a government bill of about ₹75,000 crore following the loss of a legal challenge. The reach of its network, especially in remote parts, makes BSNL a “strategic asset” that has national security implications given its role in serving the armed forces and responding to natural disasters. The revival plan, even if years late, is a clear recognition by the government of this indisputable fact.

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