Govt favors merger of BSNL, MTNL

By agencies   |   Wednesday, 01 February 2006, 20:30 IST
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NEW DELHI: The Government has favored the merger of public sector telecom units Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telecom Nigam Ltd (MTNL). Minister of State for Communication and IT Shakeel Ahmad said, “The modalities are being worked out based on the suggestions submitted to by an expert committee three months ago.” While the government is in favor of a merger, the exact modalities for affecting it would take some time because of the complexities involved, he added. Asked by when the government would take a decision, Ahmad said something concrete would take shape by early 2006-07 fiscal. He pointed out that since MTNL was a listed entity and BSNL was owned by the government, there were lots of issues required to be addressed before taking a call on the merger process. The government is finding a mid-way to benefit both the companies in the telecom sector. Ahmad said the committee has given several options, which the government might take as a preferred route for the proposed merger. One of the suggestions included that BSNL be listed on the stock exchanges ahead of the merger. Another suggestion was for creating a holding company for the two entities and then merging the two. Regarding the IndiaOne, a uniform tariff plan for all phones across the country, Ahmad said the government was thinking about how to overcome congestion of networks that might occur once the scheme is introduced. The minister said that the scheme is likely to be announced before March 31, 2005.