The Telegraph
Since 1st March, 1999
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Merger of telecom twins likely

New Delhi, Aug. 30: The government is considering merging Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) prior to any proposal of disinvestment in either of the telecom PSUs, Union communication minister Pramod Mahajan said today.

“I have asked the department of telecommunication (DoT) to prepare a comprehensive plan to merge the two PSUs and I hope the final decision will be taken soon,” Mahajan said.

Mahajan said that division of MTNL and BSNL was ‘artificial’ and not functional. “If I can sort out employees issue amicably then I will merge the two immediately.” Even otherwise, Mahajan disfavoured further disinvestment in MTNL saying “First let the VSNL experience be completed.”

A telecom commission member said the merger could take up to two to three years unless the authorities tried to hasten the process.

“This is only at an initial stage. One is a listed company and the other is unlisted. We are still wrestling with unresolved issues arising from the transfer of employees from the department of telecommunications to BSNL and MTNL,” he said.

Once these issues are sorted out, the proposal will be lobbed to the labour and law ministries for their clearances.

The finance ministry will then be involved and the implications to the budget will have to be assessed. The consultants will then be appointed for the merger.

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