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Sibal says examining proposal to merge telecom PSUs

Sibal says examining proposal to merge telecom PSUs
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First Published: Wed, Aug 10 2011. 05 57 PM IST
Updated: Wed, Aug 10 2011. 05 57 PM IST
New Delhi: Telecom ministry is examining proposals by a government body to merge state-run telecom firms Mahanagar Telephone Nigam Lyd (MTNL) and ITI Ltd with a bigger firm Bharat Sanchar Nigam Ltd (BSNL), telecom minister Kapil Sibal said on Wednesday, a move that may help them compete better with private rivals.
Sibal said a committee in his ministry was looking into proposals by the Board for Reconstruction of Public Sector Enterprises (BRPSE) that had recommended merging telecom gearmaker ITI with BSNL, or making it a separate unit of BSNL.
The BRPSE has also recommended that MTNL, which provides telecom services in the Delhi and Mumbai, could be brought under BSNL as a unit, Sibal told lawmakers in a written statement.
Shares in MTNL jumped 9.4% to Rs43.55, while those in telecom gearmaker ITI surged 11.3% to Rs27 in a Mumbai stock market that closed 1.7%up.
There have been several attempts in the past years to merge BSNL and MTNL to enable them to compete better with private sector rivals in the world’s fastest-growing market, but without any success.
Unlisted BSNL, once the country’s biggest telecom, has been losing market share to rivals. MTNL, which is listed on the stock exchanges and also on the New York Stock Exchange, is much smaller as it operates only in Delhi and Mumbai.
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First Published: Wed, Aug 10 2011. 05 57 PM IST
More Topics: Kapil Sibal | Telecom | MTNL | BSNL | ITI Ltd |