Financial Daily from THE HINDU group of publications
Friday, Sep 17, 2004
Financial Daily from THE HINDU group of publications Friday, Sep 17, 2004 |
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Telecommunications Info-Tech - Mergers & Acquisitions MTNL, BSNL synergy process begins — HSBC, E&Y among 13 shortlisted for the exercise Our Bureau
New Delhi , Sept. 16 THE Department of Telecom today invited expressions of interest from merchant bankers and consulting firms to advice the Government on finding the best option for synergising the strengths of Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd. This also includes the possibility of merger of the two state-owned telecom firms. DoT has formed a joint evaluation committee with the Department of Disinvestment for selecting a consultant. The two departments have short-listed 13 firms including HSBC , Ernst & Young, J.P. Morgan, Lazard, ICICI Securities, Kotak Mahindra, SBI Capital, Boston Consulting and Accenture. "We are looking at the possibility of synergising operations of MTNL and BSNL and in that we are looking for merchant bankers who could give us suggestions and guide us," the Communications Minister, Mr Dayanidhi Maran, said on the sidelines of an award function here. Mr Maran declined to specify the options before the Ministry with regard to "synergising" operations of the two telecom PSUs. To a specific query on whether it could mean a merger, Mr Maran said, "it can be a merger, or it can be expanding the operations." Mr Maran declined to give a timeframe for completion of the exercise saying, "We are still to identify the advisors... we are in no hurry." Officers favour merger: The Indian Telecom Service Association, which represents all the officers in BSNL and MTNL, said that it was in favour of a merger between the two. Mr S. Sirohi, Secretary, ITSA, said that the association was in favour of MTNL merging into BSNL. "The move will allow both companies to find synergies between their operations which will benefit the Indian telecom sector. "It will also allow the companies to expand services," Mr Sirohi said. However, some of the staff unions belonging to MTNL were not in favour of a merger with BSNL. Company sources said that the lower level staff were divided mid-way on the merits of the move and they could create roadblocks as the government decides on the best option for the two state-owned companies.
On the broadband policy, the Minister said it could be announced only after getting a response from the Finance Ministry on the various fiscal incentives proposed by the telecom regulator TRAI. Mr Maran had met the Finance Minister, Mr P. Chidambaram, yesterday to discuss the financial incentives for broadband. "There are a lot of financial incentives we need from the FM. He was very positive and he will consult his department people and let us know... He is considering them very strongly." Mr Maran said that the Ministry aimed at offering a "complete" package for broadband. The Finance Ministry had earlier rejected all the tax sops proposed by TRAI. On the issue of increasing foreign direct investment cap in telecom to 74 per cent from 49 per cent, Mr Maran said that matter was for the Finance Minister to decide. "The Finance Minister has made it very clear when he read out the Budget... I have nothing to add to that. In the case of FDI, the FM is the final authority. We have to abide by whatever he says. The FM and I are part of the same government," Mr Maran said. On the Left parties' opposition to the hike in FDI limit, he said, "I think the FM will explain it to them (Left parties) if the need be."
More Stories on : Telecommunications | Mergers & Acquisitions | Broadband
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