New Delhi, Oct 24 (TIWN): In order to revive loss-making telecom PSUs BSNL and MTNLNSE 4.46 %, the government today decided to merge the two ailing firms as part of a revival package that includes raising sovereign bonds, monetising assets and voluntary retirement scheme (VRS) for employees.

As part of the revival package, MTNL will be merged with BSNL. Pending this, MTNL will act as a subsidiary of BSNL. MTNL is listed but has its net worth already eroded. BSNL is unlisted.

Announcing a four step revival plan for the two companies, telecom minister Ravi Shankar Prasad said government wants to make the two state-owned telecom companies more competitive by putting in Rs 29,937 crore.

Prasad said the government will raise Rs 15,000 crore through sovereign bonds. "Assets worth Rs 38,000 crore will be monetisated in four years," Prasad added.

Prasad also announced that 4G spectrum will be allocated to BSNL and MTNL. The allocation of 4G spectrum to them would be done at 2016 prices and administratively.