Mahajan Moots Merger Of BSNL-MTNL

New Delhi, Aug 30: | Updated: Aug 31 2002, 05:30am hrs
The government is considering merging Bharat Sanchar Nigam (BSNL) and Mahanagar Telephone Nigam (MTNL) prior to any proposal of disinvestment in either of the state-run telecom giants, communications and information technology minister Pramod Mahajan has said.

I have asked the department of telecommunication to prepare a comprehensive plan to merge the two public sector units and I hope the final decision will be taken soon, Mr Mahajan told PTI in an interview here on Friday.

Mr Mahajan said division of MTNL and BSNL is artificial and not functional. If I can sort out the employees issue amicably then I will merge the two immediately.

Even otherwise, the minister disfavoured further divestment in MTNL saying let first Videsh Sanchar Nigams experience be completed.

VSNL was privatised last fiscal and the government reduced its stake to 26 per cent. The government share was bought out by the Tatas. Though the stake sale and the ensuing public issue for another 20 per cent government stake went off in perfect bonhomie, the Tatas later decision to make VSNL invest Rs 1,200 into the loss-making Tata group subsidiary Tata Teleservices Limited had invited much criticism from industry analysts as also the ministers ire.

MTNL is offering basic telecom services only in Delhi and Mumbai. But in an era of competition, the business of MTNL has reached at a saturation level, he said, adding, I do not want MTNLs value and market share to go the way it happened in the case of Maruti. However, there is no proposal for selloff either in MTNL or BSNL with his ministry, he said, adding if at all such proposal comes it will be better to create an integrated telecom company first and then divest.

BSNL has a networth of over Rs 60,000 crore, while MTNLs is about Rs 7,100 crore. The government has about 52 per cent stake in MTNL while it holds the entire stake in BSNL.

BSNL has a staff strength of nearly 3.5 lakh while MTNL has over 50,000, Mr Mahajan said, adding, before taking any decision, various employees-related issues will have to be resolved to their satisfaction.

If the employees have no objection, even if we have to pay higher salary at every level, the proposal of merging the two corporations should not be a problem, the minister pointed out.

Asked how the merger modalities will be worked out in the backdrop of MTNL being a listed company and BSNL an unlisted corporation, he said, this is just a technical issue. One can be merged with other and be called BSNL.

Linking the international long distance applications of the two corporation with the proposal for merger, he said, first we will decide on the merger and then only we will look at the international telephony proposal. (PTI)