The Hindu Business Line : MTNL wants merger talks with BSNL revived

New Delhi, Aug 2 State-owned Mahanagar Telephone Nigam Ltd wants the Government to revive discussions of a possible merger with Bharat Sanchar Nigam Ltd to provide the advantage of volume and scale enjoyed by the large private operators.

“The Government should take a decision on the merger with BSNL soon. MTNL is operating in a market which is highly penetrated even as others are going after new markets. This is, however, a policy decision; therefore I cannot comment beyond this,” Mr R.S.P. Sinha, Chairman and Managing Director, MTNL told Business Line.

The issue has been in cold storage for the past few years with issues relating to variance in pay scales between the employees of the two PSUs and MTNL’s listing at the stock exchanges coming in the way of merger. The Ministry of Communication had also invited consultants to advise on how best to go about the merger. While the consultants have given their suggestions, the proposal has not moved ahead.

MTNL has, meanwhile, written to the Telecom Regulatory Authority of India to consider the two PSUs as a single entity when it comes to regulatory issues. “MTNL and BSNL are both PSUs under DoT operating in complementary areas. The competitors have pan-India presence and the two PSUs together only can give pan India services to effectively meet the competition. Thus, for licensing and regulatory issues the two PSUs need to be treated as a single entity,” said the MTNL letter to TRAI sent on 16 July.

Fixed line revenues down

With companies such as Bharti Airtel, Vodafone Essar and Reliance Communications planning massive roll outs to rural India, MTNL stand to lose out on the booming mobile market. The revenues from fixed line have been dropping consistently having an impact on its profit margins. It does not have much scope for more revenues from mobile business as Delhi and Mumbai already have nearly 90 per cent penetration.

While it is trying to get licences in other countries, so far MTNL has managed to bag only 2 given that it has to win the rights through competitive financial bids.