Raja puts BSNL-MTNL merger on back-burner; BSNL may be listed

1 Jun 2009, 1939 hrs IST, PTI on www.economictimes.com

NEW DELHI: Telecom Minister A Raja on Monday virtually ruled out the BSNL-MTNL merger saying it is difficult due to lack of identical factor between them. "Identical factors are not there legally for BSNL-MTNL merger," Raja said.

The Minister, who assumed charge today, however, said the Department was keen on listing of BSNL and advised PSU management to start talks with the Employees Union for taking the company public. The union has been opposing the listing.

Late Communication Minister Pramod Mahajan had proposed the merger and was revived by Raja's predecessor Dayanidhi Maran for synergy purpose. Government holds 56.25 per cent in MTNL and it is listed in NYSE and in India. BSNL is 100 per cent owned by government.

MTNL provides telecom services in Delhi and Mumbai, while BSNL serves the rest of India.

On plans to list BSNL in the bourses, Raja said the management has been advised to initiate talks with the employees union.

"We want to list BSNL... We want to create a consensus for it. We have asked the BSNL management to talk to the union", said the Minister. Estimates suggest that BSNL is worth 100 billion dollars and dilution of 10 per cent stake would help the company raise 10 billion dollars (about Rs 48,000 crore).

Story in The Hindu Business Line on 02 June 2009

Decision on BSNL listing after talks with unions

New Delhi, June 1 The Communications and IT Minister, Mr A Raja, on Monday said that decision related to listing of Bharat Sanchar Nigam Ltd will be taken after discussing it with the company’s employee unions.

While BSNL had approached the Government seeking permission to go for an initial public offering, the employee unions had objected to it. The PSU is planning to offload about 10 per cent stake to the public. “We have to build a consensus around it,” Mr Raja said.

Mr Raja also ruled out the possibility of merging the two PSUs – BSNL and MTNL.

On the issue of auctioning spectrum for 3G services, the Minister said that he will seek approval from the Cabinet Committee on Economic Affairs.

The previous Government had referred the matter to a Group of Ministers but since some members of this GoM is not in the new Cabinet, the policy for 3G could be reverted back to the CCEA.

“We need to be clear on whether to get the approval from the CCEA or for a new GoM,” Mr Raja said.