Kolkata: The government is exploring ways to realise the synergies of BSNL and MTNL without actually merging the two telecom PSUs. It is actively considering a proposal to transfer its 100% stake in BSNL and its 56.25% bloc in MTNL to a holding company that will eventually be listed.
Moves are underway to list the proposed holding company that will control both BSNL and MTNL, especially in the absence of a shareholder-level consensus on the preferred route of merging both telecom PSUs.
For the moment, the government is somewhat caught between the devil and the deep sea. While it wishes to harness the synergies of the two profit-making telecom PSUs at the earliest, it has lately realised that merging BSNL and MTNL will be far from a cakewalk.
Alternately, a proposal to transfer government equity in BSNL and MTNL to a holding company, and later list it, can help DoT realise the synergies of both companies without actually merging them. “A final decision will be taken by the DoT once ICICI-Securities submits its recommendations by the month end,” said sources in the Union communications ministry.
Evidently, the government wishes to have the option to defer or altogether skirt the sticky issue of securing mandatory approval of BSNL and MTNL shareholders for a proposed merger of the two companies.
“The DoT is weighing the pros and cons of transferring the government’s majority stakes in BSNL and MTNL to a holding company that may be listed in future.

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