Breaking Deutsche Bank suggests merger with BSNL to save Vodafone Idea

[rahul1117kumar]

The government must back state control of Vodafone Idea (Vi) by quickly merging it with Bharat Sanchar Nigam (BSNL) and recapitalise the ailing telco to save it from going bankrupt, especially after the Supreme Court ruled out any relief on its huge adjusted gross revenue (AGR) dues, brokerage Deutsche Bank said.
“…the only viable solution is for the government to recapitalise Vi by converting its debt into equity, preferably while merging it with BSNL, and then providing it a clear commercial mandate based on profitability targets and incentives,” Deutsche Bank said in a note seen by ET.

Deutsche Bank suggests merger with BSNL to save Vodafone Idea - ET Telecom

Vodafone Idea: At present, Vi owes the Department of Telecommunications more than Rs 1.5 lakh-crore by way of AGR and deferred spectrum payment dues.

telecom.economictimes.indiatimes.com

 

[Esmail]

It's just a recommendation by Deutsche Bank, it is unlikely that DoT will consider it seriously. Rather than government control for Vi they will look to privatise BSNL.

 

[Itsme...]

It's just a recommendation by Deutsche Bank, it is unlikely that DoT will consider it seriously. Rather than government control for Vi they will look to privatise BSNL.

BSNL merger with VI should happen. Government will hold it's share. But will have no control over management. Like in case of ITC. Otherwise both will go down.

 

[rohitvatsa]

BSNL merger with VI should happen. Government will hold it's share. But will have no control over management. Like in case of ITC. Otherwise both will go down.

BSNL is already grappling with losses.What sense would it make to merge a company like VI with massive debts into an already loss making company?The expectation is that GOI would carry the burden of VI that's it.
Anyway Govt. needs to look at its policies to see how telecom companies except Jio are suffering massively.This can't continue.Even Airtel has huge debts but it is on positive road to recovery

 

[Itsme...]

BSNL is already grappling with losses.What sense would it make to merge a company like VI with massive debts into an already loss making company?The expectation is that GOI would carry the burden of VI that's it.
Anyway Govt. needs to look at its policies to see how telecom companies except Jio are suffering massively.This can't continue.Even Airtel has huge debts but it is on positive road to recovery

Telecom sector is not good since 2G spectrum verdict by SC. Then Jio and AGR made it worse. About debt part, GOI is constantly fueling BSNL with Capital. Otherwise BSNL would not survive with the loss they are making. They should sell it or Merge it with another telecos. Good for BSNL customers who will experience more professionalism and for that co who will buy it as BSNL has huge intangible asset.

 

[rohitvatsa]

Good for BSNL customers who will experience more professionalism and for that co who will buy it as BSNL has huge intangible asset.

What makes you think that reverse won't happen?Anyway BSNL has got little bit professional over the years since the govt. tightened the funding and started demanding for results

 

[Esmail]

VSNL was bought by TATA, let's see who buys BSNL.

 

[TheAndroidFreak]

The government must back state control of Vodafone Idea (Vi) by quickly merging it with Bharat Sanchar Nigam (BSNL) and recapitalise the ailing telco to save it from going bankrupt, especially after the Supreme Court ruled out any relief on its huge adjusted gross revenue (AGR) dues, brokerage Deutsche Bank said.
“…the only viable solution is for the government to recapitalise Vi by converting its debt into equity, preferably while merging it with BSNL, and then providing it a clear commercial mandate based on profitability targets and incentives,” Deutsche Bank said in a note seen by ET.

Deutsche Bank suggests merger with BSNL to save Vodafone Idea - ET Telecom

Vodafone Idea: At present, Vi owes the Department of Telecommunications more than Rs 1.5 lakh-crore by way of AGR and deferred spectrum payment dues.

telecom.economictimes.indiatimes.com

Will be best decision ever.

 

[TheAndroidFreak]

BSNL merger with VI should happen. Government will hold it's share. But will have no control over management. Like in case of ITC. Otherwise both will go down.

They have three bands in common. Band 8/1/41. BSNL has infrastructure. Vi can simply deploy the spectrum and gear and BSNL can act as MVNO. Even if Vi takes spectrum of BSNL and deploy,Airtel will go out of the competition immediately. Total of 10-15Mhz of band 8 and 20-30Mhz of band 1 will give tremendous boost to Vi network. It's just six months game and there will be stiff competition unlike current monopoly.