04 April 2023

The merger between India’s state-run telecoms carriers Mahanagar Telephone Nigam Limited (MTNL) and Bharat Sanchar Nigam Limited (BSNL) faces another hurdle.

The government needs to delist MTNL from the stock exchanges for the merger to proceed to the planned completion at the end of next year.

The legal complexities are being explored and consulting firm Deloitte has been appointed to advise.

This merger has been on hold for more than ten years. The most recent delay was reportedly due to MTNL’s debts, which are close to 300 billion rupees.

However, the delisting could be a long process and must involve discussions with markets regulator the Securities and Exchange Board of India (SEBI) as well as a detailed report on the legal issues and how to move forward with the delisting process.

Both companies have benefited from massive government investment in revival packages over recent years, but improvement in both companies’ fortunes has also been tied to voluntary retirement schemes, debt restructuring by raising of sovereign guarantee bonds, administrative allotment of spectrum for 4G services through capital infusion, monetization of core and non-core assets and, of course, a merger between BSNL and MTNL.