`No purpose in making MTNL a BSNL subsidiary'

Ahead of a crucial meeting of DoT with the two PSUs to decide on the next step towards synergising their operations, MTNL today said that making it a subsidiary of BSNL will not yield the desired result behind the proposed move.

ICICI Securities, which submitted its report to DoT last month, is believed to have suggested making MTNL a subsidiary of BSNL with the former retaining an independent board.

"This suggestion does not give any benefit or result which was visualised in case of merger as these two companies will remain separate entities and will have to maintain an arm's length distance," MTNL CMD R S P Sinha said when asked to comment on the suggestion.

"This is because MTNL is a listed company on the domestic bourses as well on the New York Stock Exchange (NYSE)," Sinha added.

Sinha also said that MTNL and BSNL are complementing each other's operations. "We are not competiting with each other", Sinha said.

ICICI Securities has shorlisted four options for the proposed process, according to the first report of the bankers.

The options are merger of two PSUs or making one a subsidiary of the other based on a 5-point criteria -- competitive position, shareholder value, cost implication, execution difficulties, including where the funds will come from and time period.

DoT has convened a meeting of all the stakeholders and the consultant on March 21 to discuss the future course of action on basis of options given by the consultant.