4G service Current Affairs - 2020

GoM constituted to fast track revival plan of BSNL

On December 27, 2019, GoI constituted a 7-member group of ministers to fast track the implementation of revival plan of BSNL and MTNL. The revival plan includes allocation of 4G spectrum and asset monetization. Earlier, GoI approved the revival plan of merging BSNL and MTNL.

Highlights

The seven-member group of ministers include Defence Minister Raj Nath Singh, Telecom Minister Ravi Shankar Prasad, Finance minister Nirmala Sitaraman, Home Minister Amit Shah, Oil Minister Dharmendra Pradhan and Commerce Minister Piyush Goyal.

The crucial elements of the revival plan include workforce, business viability, monetization, issue of bonds and 4G spectrum allotment. GoI allocated Rs 69,000 crores for reviving BSNL and MTNL. Both the entities have been reporting losses over a decade.

Group of ministers

Group of ministers are appointed by the GoI under Transaction of Business Rules, 1961. According to para 6 (4) of the rules, Ad hoc committees of ministers including GoM sha;; be appointed by standing committee of cabinet, cabinet or by the PM. The GoM do not have decision making powers. They investigate and report to the cabinet. On the other hand, Empowered Group of Ministers (EGoM) can make decisions. They are also formed by GoI.

In 2014, EGoM was dissolved and the changes are still under process.

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BSNL Revival Plan

The Union Cabinet on October 23, 2019 approved the proposal for revival of BSNL and MTNL. It allotted the 4G spectrum to the institutions. The MTNL will act as a subsidy to BSNL. A four-step revival plan has been announced for BSNL. Also, the GoI plans to raise Rs 15,000 crore through sovereign bonds.

Significance

Both BSNL and MTNL were making losses for the state since a long time. MTNL is Mahangar Telephone Nigam Limited, a state-owned entity that provides telecom services at New Delhi and Mumbai and in Mauritius. It was founded in 1882. There are around 25,191 employees working with the company.

The BSNL loss is estimated to be around Rs 14,000 crore with a decline in revenue of Rs 19,308 crores during 2018-19. The loss of MTNL was around Rs 755 crores (in Q4, May 2019). The companies hold salary dues and pension dues for the employees. The total debts held by the companies amount to Rs 40,000 crores.

With merger under Rs 70,000 crore plan and 4G spectrum offering will help the entities in monetizing their assets. They can raise capital expenditure required to roll out the network and bring in efficiency in their operations.

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