The duo is very likely to sign a network assimilation pact tomorrow that will enable these two organizations to offer pan-India coverage, said sources close to the deal,
“BSNL and MTNL have decided to sign a MoU (Memorandum of Understanding) to create synergy between the two organizations to provide pan-India services,”
MTNL provides its services within Mumbai and Delhi, whereas BSNL has coverage in the rest of Indian regions. According to the new pact, MTNL would avail the network of BSNL only for national roaming service for its subscribers except in Delhi and Mumbai. At the same time, BSNL will only use MTNL network for roaming services to its customers in Delhi and Mumbai.
Since the inception, MTNL subscribers have been able to roam on BSNL networks across India. At the same time, BSNL customers could stay connected due to MTNL’s active network within Mumbai and Delhi. Hence, the new pact presumably doesn’t offer any new incentive to the customers. Accordingly, it seems redundant to sign such a pact that merely reiterates previous agreement. However, there is more to the situation. BSNL and MTNL have been struggling with falling revenues, complaints of sketchy services and abandoning customers who are leaving in hordes, to join other private service providers. Owing to such adverse conditions, the Public Sector Units (PSU) are under heavy financial burden and there have been talks in the past to seek trifurcation of these companies to consolidate the operations.
BSNL and MTNL, being Government entities, have always been shielded and protected, despite making recurring losses. Additionally, these companies apparently complained that they are not able to provide services throughout the country “On competitive basis” due to geographical restrictions as per license conditions, while their privately-run rivals are providing pan-India services.
Under this new arrangement, MTNL is said to offer all it’s NLD (National Long Distance) traffic to BSNL, except for the traffic between Delhi and Mumbai, thereby enhancing synergy. Do you think such a measure is enough to arrest the losses and offer a new lease of life to these ailing PSUs?
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