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A parliamentary panel on Friday said that the merger of BSNL and MTNL would give them a chance to fight or take on the private sector which is undergoing consolidation.
According to a report in PTI, Committee on Petitions tabled in the Parliament said that, "The committee is of the view that for the long-term survival and success of MTNL and BSNL, their merger would only be a viable proposition - in view of the fact that their merger would give both the entities a chance for competition against the emerging consolidated private sector players."
The report pointed out that, the Committee on Petitions said that Department of Telecom had provided suggestions to constitute an expert group to examine the prospects the merger.
Furthermore the report said that the ministry had provided two suggestion to the government that merger would give them a chance to become a pan-India integrated offering wired and wireless telephony services and secondly this will provide an option to MTNL focusing on a turnaround with support from the government and shareholders and seeking opportunities to sell and divest select business assets.
To recall, this year in May Telecom Minister Manoj Sinha said that it has not taken any decision on the merger of MTNL and BSNL.
He said, "We have not taken any decision on the merger issue."
In fact last year in November, Manoj Sinha had also said in written reply to the Rajya Sabha that, "In a case of MTNL, it has been going slow in up gradation of equipment during the last 4-5 years due to severe financial problems. MTNL is under serious debt burden and is borrowing money to meet its day to day requirements."
Mahanagar Telephone Nigam Ltd (MTNL) is offering services in Delhi and Mumbai and Bharat Sanchar Nigam Ltd (BSNL), on the other hand, is operating across rest of India.