SBI will see it’s essential merger with arms in a year

5th November 2004: AK Purwar, the chairman of State Bank of India (SBI) gave six months to one year for the merger of SBI with its seven associate banks. Mr. Purwar said, “We might see a virtual merger in six months to one year.” The merger of SBI with its associates has been on the cards for a long time. Presently, the seven associate banks are State Banks of Patiala, Bikaner and Jaipur, Indore, Saurashtra, Mysore, Hyderabad and Travancore, which operate through separate branches.

Hutch got the approval for merger

3rd November 2004: Hutchison Telecommunications International Ltd. said its Indian operating arm Hutchison Max Telecom Private Ltd had received Indian government approval for its planned consolidation with Hutchison Essar Telecom Ltd, Hutchison Telecom East Ltd, Fascel Ltd and Hutchsion Essar South Ltd. HMTL and those assets and their subsidiaries combined currently cover 13 license areas and have a total subscriber base of about 6.4 million as at September 30, Hutchison Telecom said in a statement. "HMTL intends to take the remaining steps required to implement such consolidation as soon as practicable," the statement said.

BSNL, MNTL merger to be expected by early 2005

28th October 2004: The Bharat Sanchar Nigam (BSNL)-Mahanagar Telephone Nigam (MTNL) merger is likely to be completed by mid 2005. Dayanidhi Maran, the telecom minister said, “The exact merger route will be finalised some time over the next 3-4 months.” He also added that as of last week, the wireless sector has overtaken the fixed-line service in the country. “Our current estimates are that an additional investment of about Rs 1,60,000 crore would be required to reach a target of 200m telephones by 2007. Furthermore, we are aiming at a rapid growth of internet and broadband, with 10m broadband and 20m internet connections by 2007,” he said.

He made a case for more foreign direct investment (FDI), saying that the total FDI in the telecom sector till date has been to the order of only $2.5bn. Regarding a hike in FDI in telecom from 49% to 74%, Mr. Maran said, “We will take a decision after consensus and then stand by it.” He spoke about the interest shown by several multinationals in considering India as a manufacturing destination. For example, LG and Samsung have shown an interest in manufacturing handsets in the country.

Mr. Maran ruled out the possibility of unbundling of local loop soon. “Although it sounded attractive, we have to be more cautious in unbundling. It has stopped in the US too. Also, in India, PC penetration is low,” he said. He also ruled out allowing VoIP for domestic long distance calls, saying the Department of Telecom (DoT) is analysing the proposal. Broadband will be made available to consumers at speeds of 256K and at less than Rs 500 per month.