Date:07/10/2004 URL: http://www.thehindubusinessline.com/2004/10/07/stories/2004100702540600.htm

Back Sam Pitroda favours greater autonomy for MTNL, BSNL

Our Bureau

New Delhi , Oct. 6

TELECOM icon and member of National Advisory Council Mr Sam Pitroda, today favoured greater autonomy for state-owned telecom firms MTNL and BSNL either "individually or collectively" and said the ultimate goal should be to reduce Government holding to below 51 per cent.

"They (BSNL and MTNL) need to be given autonomy individually or collectively. If it can be done through a merger or by taking BSNL public as a separate entity, so be it. The ultimate goal should be to reduce Government holding below 51 per cent," Mr Pitroda said on the sidelines of CII Leadership Summit here.

He said in case of a merger, BSNL would become a public entity overnight as MTNL was already listed.

The reduction in holding should be done by offering equity to the public, and not to strategic investors.

Mr Pitroda's comments come in the wake of Government's proposal to find synergies between the two state-owned telecom companies, including the possibility of a merger.

Department of Telecom has already invited expressions of interest from leading merchant bankers and consultants to advise on the best option for synergising the operations.

Mr Pitroda stressed on the need for a level playing field for BSNL and MTNL. "This can come through autonomy and flexibility as they are competing with private players in the market. Autonomy is the primary issue," he said.

On the contentious issue of hike in foreign direct investment limit in the telecom sector from 49 per cent to 74 per cent, Mr Pitroda said the debate on concerns relating to security was "unnecessary". "Security is no longer an issue. Security matters when there is a monopoly but now we have multiple networks," he said.

Mr Pitroda said that the debate was a part of the growing up process and pointed out that developing a consensus was "important".

Asked about his advice to the Government on the FDI issue, he said, "I am not giving an advice. Let there be a debate. Let us not intervene. It will be sorted out."