India set to finally merge state-owned telcos

The Indian government is reportedly planning to further consolidate its alphabet soup of state-owned operators.

The main source of this information is a report in the Hndu BusinessLine, which quotes BSNL Chairman and MD PK Purwar, speaking at a recent industry event. “The government has taken a policy decision that BBNL is going to be merged into BSNL,” said Purwar. “This means all work of BBNL at the pan-India level is going to come to BSNL.”

BSNL stands for Bharat Sanchar Nigam Limited and BBNL refers to Bharat Broadband Network Limited. They both seems to operate primarily as wholesale broadband network providers. For reasons best known to the Indian state, when it decided to get involved in fixed-line infrastructure it thought it might be a laugh to create a few companies.

MTNL was incorporated BSNL in 2019, so this seems to be the next phase in a strategy of combining several inefficient, loss-making telcos into one. At least the government will save money on accountants and now it can focus all its bail-out attention in one place.

And that seems to be the extent of the cunning plan. According to the Financial Express, the Indian government plans to chuck some of the money it has managed to squeeze out of Vodafone Idea and Bharti Airtel to continue to prop up BSNL. It might as well just nick the rest of Vodafone Idea and throw that into the mix too, since that seems to be where we’ll be in a few years anyway.

If this move does go ahead, once the dust settles India will effectively be left with dominant player Jio, former market leader Bharti Airtel, and a sprawling conglomerate of state-owned assets that will presumably require regular bailouts in perpetuity. What this means for the Indian telecoms consumer is unclear but if it results in accelerated infrastructure rollout then maybe it’s the best way forward from where we are now.

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