Ministry to speed up telecom merger

The ministry of communications and information technology is inclined to speed-up the merger process of state-owned Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL), dispelling myths that the process was put on hold.

However, the ministry has ruled out any possibility of divesting in the two telecom giants and stated that the merged entity would be run as a state-owned company.

Dayanidhi Maran, Union minister for communications and IT, was in Mumbai last week and had met officials of both MTNL and BSNL.

He is also believed to have met union leaders and staff of the telecom companies and discussed the merger issue. Quoting the minister, sources in BSNL said that the Centre's first priority was to merge BSNL and MTNL and make it a formidable company.

The merger would help the public sector units (PSUs) to ward off competition from private sector, apart from positioning the merged entity as the leading telecom player in the country.

He said there was no need of disinvesting in the two telecommunication companies as both in their individual capacities have done well to provide best services to the public at fair prices.

Maran also assured them that the merger was on track, even though he did not provide a time-frame for the proposed amalgamation.

Earlier in February, the minister was reported to have said that the merger would take place within three months as the department of telecommunication (DoT) was looking into the report submitted by advisors.

The minister was of the opinion that there "is a synergy between the two companies and as they would complement each other, merger was the best option," sources said.

A high-powered committee of DoT is considering the option of merger but the only bottleneck is MTNL being a listed company, unlike BSNL.

The ministry would also look into the listing possibilities of BSNL.

The merger plans is being opposed by MTNL as the PSU has "reservations" in becoming a subsidiary of BSNL. This has also led to the belief that the merger plans have been put on hold.

The ministry also ruled out the possibility of divesting the two telecom PSUs, stating that a divestment proposal was not on the agenda .