In a bid to revive BSNL and MTNL, department of telecom is working on modalities to merge the two state-run telecom companies and also undertake organisational restructuring.
"The merger of BSNL and MTNL is definitely on the table for the revival of these firms. We are working on it," a source in department of telecom (DoT) told PTI.
Asked if there is a timeline for the merger, the source said there is no set timeframe but it might take 1-2 years.
Minister of communications and IT Ravi Shankar Prasad had also met the senior management of BSNL and MTNL recently to discuss the blueprint for reviving the loss-making PSU telecom companies.
The total debt of the two firms has increased to Rs 21,208 crore at the end of June 2014.
The public sector firms are also losing market share. The market share of BSNL has been reduced to 12.3% at the end of May 2014 from 13.27% at end of March 2012 whereas that of MTNL stood at 4.83% at May-end, 2014.
The reasons cited for the decreasing market share of the two firms include there inability to expand coverage due to financial and procurement problems, lack of adequate skills set due to changing nature of technology and customer centric business with focus on sales, marketing and customer services.
Prasad has said in Parliament that the government has taken measures to revive the two state-run telecom firms which include waiver of Rs 1,411 crore government loan to BSNL and financial support of Rs 6,724.51 crore to BSNL and Rs 4,533.97 crore to MTNL on surrender of broadband spectrum.
In 2012-13, MTNL recorded a net loss of Rs 5,321.12 crore on annual revenue of Rs 3,428.6 crore.
BSNL losses, as per unaudited results, stood at Rs 8,198 crore for 2012-13.