BSNL and MTNL merger on the backburner

21 Jul 2009

A proposed merger between state-owned operators Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) has been put on hold, the Economic Times reports. The government-led proposal has been temporarily set aside, with the Minister of State Information Technology and Communications, Gurudas Kamat, noting: ‘Since the enabling conditions for the suggested options are not appropriate enough to lead to a successful merger and considering the complexity of the issues involved, the restructuring of BSNL and MTNL has been put on hold for the time being.’

Separately, the Business Standard reports that BSNL chairman and managing director Kuldeep Goyal has said that his personal view is that a merger between the two telcos would offer operational benefits, but that if the tie-up did not go ahead it would not pose a problem. If the merger does proceed it is expected that the combined entity would generate revenue of around INR390 billion (USD8.1 billion) per year, more than nearest rival Bharti Airtel, which has an annual revenue of around INR370 billion.

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