The Board for Reconstruction of Public Sector Enterprise (BRPSE) has recommended that staterun telecom
Bharat Sanchar Nigam Ltd (BSNL) should take over the ailing public sector undertaking (PSU) Indian Telephone Industries (ITI) as the merger will help the state-run firm compete with Chinese equipment manufacturers.
Stating that the move is a strategic vertical integration, the Board has recommended that the merger of ITI with BSNL or its takeover by BSNL should be as a separate subsidiary.
"This should enable BSNL to combine service providing with manufacture of products and, thus, emerge as a leading global player as some of the Chinese companies have done in recent times," the Board said.
ITI, a telecom equipment manufacturing company, has units at Palakkad, Bangalore, Srinagar, Naini, Rae Bareli and Mankapur.
It had posted a higher net loss of Rs 104.34 crore for the quarter ended December 31, 2010, against Rs 53.15 crore in the same period last financial year.
For long, ITI had been enjoying the preferred vendor status from BSNL under a reserved category.
The Board said ITI's product mix could be appropriately changed to enable it to produce mobile phones and other products by bringing in the latest foreign technologies.
The merger of ITI with BSNL has been on the government's agenda for the last few years. However, the BSNL Employees Union have opposed the proposed merger saying it would put financial burden on the telecom operator. The Union has announced a lunch hour protest on April 5 against the proposed merger.
"ITI must be given all assistance by the government but merging it with BSNL makes no sense as it already has seven factories," VAN Namboodiri, convener of Joint Forum of Executives and Non-Executives' Unions and Associations said.
Courtesy: Mail Today 
Special 
