BSNL to be listed on BSE, to merge MTNL

By SiliconIndia   |   Tuesday, 29 July 2008, 12:33 Hrs
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New Delhi: BSNL is soon to be listed in the stock market. According to the official sources Government of India plans to merge BSNL with another major telecom provider MTNL, which is operating in the major Indian cities, reported The Economic Times. The merger is expected to be one of the largest in the Indian telecom industry.

According to the telecom industry officials the government has provided a common prefix number (2) for both BSNL and MTNL. This also indicates the government's plan for a merger. BSNL has 35 million landlines across the country and MTNL has five million in Delhi and Mumbai.

Some government officials in the Telecom Ministry said the deciding factor was simply that `2' was assigned to the two state-owned operators and that in any case the two operators do not have overlapping territories.

However, another official said that the proposal for merging of BSNL and MTNL was discussed during the NDA regime and shelved. With BSNL's Initial Public Offer (IPO) looking a clear possibility now, the proposal is being reviewed. He added that after the company listed in the Bombay Stock exchange (BSE), it could explore various possibilities, which may include an open offer or a share wrap deal.

Earlier, Department of Telecom (DoT) had appointed a financial consultant to look in to the proposed merger between BSNL and MTNL in 2004. Since MTNL is already listed on the BSE, the listing of BSNL too, is suggested to be making the merger more meaningful. The UPA government's previous effort to list BSNL on stock exchange had opposed by the left parties.

The government believes that the merger of these two public undertakings will generate revenue of 45,000 crore which will be highest among the Indian telecom providers both in public and private sectors.

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