Pending merger, MTNL-BSNL asked to synergise operations: DoT

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After dilly-dallying for years, the government has asked the two telecom PSUs, BSNL and MTNL to synergise their operations and function as one entity, pending the merger, offering Pan-India services.

BSNL provides all telecom services fixed line, mobile, STD, ISD, broadband, Internet and others in 20 circles other than the two metros, Delhi and Mumbai, where MTNL operates.

Functioning separately denies BSNL to offer services in India's two most lucrative telecom markets (Delhi and Mumbai), and restricts MTNL from expanding beyond the two metros.

There is, no doubt, a good reason for both to have combined operations, but there are practical problems going forward, Telecom Secretary R Chandrasekhar said.

"We have directed them to actually work out plan to syrengise their operations so that even if they are two separate entities they can work out a mode of functioning as a pan-India service provider," he told the media in an interview.

BSNL, once the country’s flagship telecom company, posted a net loss of Rs 1,823 crore on revenues of Rs 32,046 crore in 2009-2010. The company had net profit of over Rs 10,000 crore in 2005-06. MTNL, on the other hand, posted a net loss of Rs 2,826 crore in 2010-11.

For years, there have been various moves to merge the two but they failed to fructify so far.