Panel recommends merger of BSNL-MTNL

A Parliamentary Committee on Friday favoured the merger of loss-making state-owned telecom firms BSNL and MTNL, saying it would give them a fighting chance to take on the might of private sector.

The 43rd report of the Committee on Petitions of the Department of Telecom (DoT) tabled in Lok Sabha, said that for "the long-term survival and success of MTNL and BSNL, their merger would only be a viable proposition - in view of the fact that their merger would give both entities a chance for competition against the emerging consolidated private sector players".

The panel noted that the DoT had outlined two options for turnaround - one of the options entailed MTNL focusing on a turnaround, with support from the government and shareholders and seeking opportunities "to sell and divest select business assets".

The second option was about seeking opportunities for merger of MTNL with BSNL to become a pan-India integrated telecom operator offering wired and wireless telephony services.

This would also allow them to optimise resources and increase revenue through synergised operations, the panel said, adding that the Ministry of Communications should explore ways to implement the revival plan of the state-run companies without further loss of precious time.