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Our Bureau

New Delhi , March 21

A FEW days before the Government meets to discuss synergising operations between Mahanagar Telephone Nigam Ltd and Bharat Sanchar Nigam Ltd, the former hardened its stance and said that the process would lose its relevance if there was no direct merger between the two companies.

MTNL's views assumes significance in the light of the ICICI Securities report which suggested that the company be made the subsidiary of BSNL as one of the option to synergise the two businesses.

Top MTNL officials said that the company was in favour of a real merger with BSNL since the idea behind the process was to take advantage of each other's strengths.

The official said that anything short of a merger with BSNL would not produce the wanted results.

They, however, added that the final decision is with the Government and MTNL will accept whatever was decided by the high-level committee set up to study the proposal from ICICI Securities, advisors to the Government.

ICICI Securities had earlier given a number of options including that of BSNL picking up the Government's 52 per cent stake in MTNL. The committee is expected to meet on Thursday.

Interestingly, MTNL's views are in contrast to those of BSNL. Mr A.K. Sinha, Chairman and Managing Director, BSNL, had earlier said that the management was weighing the pros and cons of the report submitted by ICICI Securities, but favoured the option of making MTNL its subsidiary.

ICICI had also given the option of a direct merger between the two companies.

Currently, MTNL offers telecom services in most lucrative markets of Delhi and Mumbai, while BSNL offers services in other parts of the country.

While BSNL has the licence for offering long distance services, MTNL is restricted to local telephone services.

The restrictions on the two companies has put them at a disadvantage compared to large integrated private telecom players such as Bharti and Reliance, which can offer all type of communications services across the country.

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