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BSNL- MTNL to be bifurcated

New Delhi, May 13 (): BSNL and MTNL are to be split into two companies apart from the existing one to pave way for the revival of the sick PSU according to a group of ministers. The plan is to create two new companies — one handling network infrastructure and another for land development. BSNL and MTNL would handle services and marketing of telecom products.

The new company created would look after the infrastructure like telecom towers and networks including technology while another would manage the land assets and means to raise money for them.
The GoM would also look at proposals to pump cash into the two telcos after BSNL surrendered six circles spectrum and MTNL gave up in Mumbai and Delhi. The government would refund BSNL and MTNL the entire Rs 11,259.48 crore they had paid for the spectrum. BSNL paid Rs 6,724.51 crore and MTNL Rs 4,533.97 crore in 2008. If paid on a pro rata basis the total pay-out would be Rs 8722 crore. The breakup would be Rs 5,204.98 crore to BSNL and Rs 3,517.80 crore to MTNL.

The proposed moves are the government’s first steps towards to eventually merge BSNL and MTNL. Together they have accumulated losses of Rs 38,440 crore. BSNL loss is Rs 24,681 crore and MTNL is Rs 13,759 crore, based on 2012-13 fiscal results.

BSNL, in its proposed financial plan, has stated it will be able to get Rs 250 crore in 2013-14 by the sale of land, apart from Rs 250 crore a year through rental income from its building starting 2016-17. The firm has landed property in Santa Cruz, Borivali and Deonar (Mumbai), NCR‘s Noida’s Sector 18 and 33 and Gurgaon’s Sector 18, apart from some land in Kolkata, Hyderabad, Chennai and Trivandrum.

BSNL has appointed KPMG to suggest means to hive off its tower business. BSNL is also leasing out capacity in its Kolkatta, Mumbai, Khargpur, Jabalpur, Bhilai and Gopalpur factories manufacturing microwave towers and SIM cards to the private sector.