The initial public offering (IPO) of state-owned Bharat Sanchar Nigam Ltd (BSNL) is not the only issue over which the government has gone back.
NEW DELHI: The initial public offering (IPO) of state-owned Bharat Sanchar Nigam Ltd (BSNL) is not the only issue over which the government has gone back and forth. BSNL’s merger or synergy with the other telecom PSU, Mahanagar Telephone Nigam Ltd (MTNL), is another issue on which the government has not been able to take a decision for years.
Although the proposed BSNL-MTNL merger is widely believed to be on the backburner, a source in BSNL told this newspaper that “the issue is not dead yet.”
Merger or synergy between these two telcos will be the only way to beat competition, the source pointed out.
While BSNL operates telecom services across the country except in Mumbai and Delhi, MTNL is present in only the two metros (Mumbai and Delhi).
Officials denied that BSNL would be allowed to go to Delhi and Mumbai, and MTNL to the rest of the country, without the two entities merging.
A few months ago, BSNL slipped in the overall GSM (global systems for mobile communications) ranking in terms of subscriber numbers. From the second position, it dropped to number three. Currently, Bharti is the top GSM player in terms of subscriber numbers at 55.1 million, followed by Vodafone Essar at 39.8 million, and BSNL with 32.7 million.
However, BSNL aims to be the market leader by 2010. This objective can be fulfilled only if BSNL and MTNL merge, a BSNL official pointed out. While BSNL is targeting over 100 million mobile subscribers (mainly GSM) by the end of 2010, CDMA major Reliance Communications and GSM players Bharti and Vodafone have similar projections for their respective GSM services.
Merchant bankers, which were appointed for advising the government on the synergy between BSNL and MTNL, had given four options for the same. Subsequently, the issue was put on the backburner. Direct merger of the two was one of the options.
Recently, BSNL officials had said on the sidelines of a conference that the PSU was gearing up to come out with a mega IPO of $10 billion. But, the following day, the Department of Telecommunications denied that BSNL was coming out with an IPO.
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