The Hindu Business Line : BSNL `in favour of' making MTNL its subsidiary

BHARAT Sanchar Nigam Ltd (BSNL) has said that it was in favour of making Mahanagar Telephone Nigam Ltd (MTNL) as its subsidiary in order to synergise the operations of the two State-owned telecom companies.

Addressing members of the Associated Chambers of Commerce and Industry of India (Assocham) at a panel discussion on `Accelerating Broadband through Convergence,' Mr A.K. Sinha, Chairman and Managing Director, BSNL, said that the BSNL management is weighing the pros and cons of the report submitted by ICICI Securities, but favours the option of making MTNL as its subsidiary. The company is expected to submit its views on the report to the Department of Telecom in the next few days.

ICICI Securities, advisors to the government on MTNL-BSNL merger, had said that one of the options was of BSNL picking up the Government stake in MTNL to make it a subsidiary. ICICI had also given the option of a direct merger between the two companies.

Mr Sinha also said BSNL will invest Rs 150 crore for setting up digital satellite phone terminals (DSPT) in as many as 14,000 villages by December 2006. Each terminal would be put up at a cost of about Rs 1 lakh for which a part of funding will be provided to BSNL from the Universal Services Obligation Fund.

Speaking at the seminar, Ms Janet Davidson, President, Integrated Network Solutions, Lucent Technologies Inc, US, said that India offered high potential for connectivity in both rural and urban areas. According to her, estimated addressable market today stands between 140 million and 200 million for which the telecom companies are in competition to capture the large chunk of the Indian rural market.

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