Shourie wants to study proposal for merging MTNL, BSNL

Our Economy Bureau
31 January 2003

“In general in India, we’re not able to manage mammoth organisations,” says Shourie when asked about the proposed merger of these two telecom giants.

Shares of MTNL have jumped since a cabinet reshuffle on 29 January 2003 in which Shourie replaced Pramod Mahajan as communications and information technology minister. Mahajan was seen as favouring a merger between MTNL and BSNL. Analysts believe MTNL would be easier to privatise if the telecom giants are not merged.

Shourie says he needs time to study whether there would be any sales of stakes in MTNL and BSNL. He hasn’t fixed any timeframe for reaching a conclusion. “I have asked both for details about their market share and their competitiveness. I have also requested them to inform me about the handicaps they are facing and what steps need to be taken to remove them.”

He says he wants competition in the telecom sector. “But intense rivalries must not hurt balance sheets. There must be competition. At the same time, there must not be predatory practices. India is large enough, so there’s room for everybody.”