I-Sec gets BSNL-MTNL deal

To submit report by March 10.

The government has appointed a consortium led by ICICI Securities (I-Sec) as the advisor for synergising the operations of BSNL and MTNL - a move likely to see the merger of the two public-sector telecom companies at a later stage.

The consortium includes ABN Amro, NM Rothschild, A F Ferguson and law firm Desai & Dewanji.

I-Sec has been given time till March 10 to submit its report. It will work in co-operation with the advisory panel set up by the department of telecommunications (DoT) to look into the ways and means available to synergise the operations of the two telecom PSUs.

Official sources also indicated that BSNL and MTNL have been asked to give the advisor all financial data as well as their views about the pros and cons of the initiative.

The advisor would study the strengths and weaknesses of the two state-run telecom majors, and the possible synergies between the two firms. It would also examine the merits and demerits of a merger between BSNL and MTNL, and the method to be adopted for the same. The government hopes to complete the entire exercise by mid-2005.

One of the options to be considered by the government is the buy-back of MTNL's shares to merge it with BSNL. While the advisors will make their own recommendations, sources said DoT is not exactly in favour of any stake sale in BSNL.

While the government owns about 56% stake in MTNL, BSNL is 100% owned by the government.