Date:22/10/2004 URL: http://www.thehindubusinessline.com/2004/10/22/stories/2004102202770600.htm

Back `BSNL-MTNL merger will be in national interest'

Our Bureau

Mr A.K. Sinha (left), Chairman and Managing Director, BSNL, with Mr S.C. Choudhary, Director (Operations), addressing a press conference in the Capital on Thursday. - Ramesh Sharma

New Delhi , Oct. 21

BHARAT Sanchar Nigam Ltd on Thursday favoured a merger with Mahanagar Telephone Nigam Ltd, stating that such a move would be in the national interest.

"If BSNL is merged with MTNL, it will be in the nation's interest. It will save lot of cost for both the public sector undertakings," the BSNL Chairman and Managing Director, Mr A.K. Sinha, told newspersons.

The Government owns about 55 per cent stake in MTNL while BSNL is 100 per cent state-owned.

The Department of Telecommunications has already initiated the process of appointing advisors to pursue the matter, Mr Sinha said. He also held that DoT would have to take the decision on the methodology that needs to be adopted and the financial implications of any such decision.

Meanwhile, six merchant bankers are understood to be in the race for being appointed as advisors to the Government on the best possible route for bringing about synergy between the two organisations.

The Government has been considering various options including divestment of up to 5 per cent stake in BSNL so as to list it on the stock exchanges. This is likely to facilitate merger between the two, as MTNL is already a listed company. Another option that may be considered is buyback of MTNL's shares and then merge it with BSNL.