In order to turnaround Bharat Sanchar Nigam Limited’s (BSNL) loss making operations, the Board for Reconstruction of Public Sector Enterprises (BRPSC), which advises financially troubled state-run companies has recommend that it merge with Mahanagar Telephone Nigam Limited (MTNL) and Indian Telephone Industries (ITI).
In its report, the BRPSC stated, “The board strongly recommends the merger of ITI with BSNL, or its takeover by BSNL as a separate subsidiary, thereby ensuring strategic vertical integration. This should enable BSNL to combine service-providing with manufacture of the products and thus emerge as a leading global player as come of the Chinese companies have done in recent times.?
The BRPSC report also adds that ITI’s product mix could be appropriately changed to enable it to produce mobile phones and other products by bringing in latest foreign technologies. It also states that ITI’s accumulated losses may help BSNL to gain tax advantages.
“Similarly, there is no reason for MTNL to continue as a separate entity. This could be brought under BSNL as a subsidiary,” the report adds.
