While MTNL offers services in the lucrative Delhi and Mumbai circles, BSNL operates in the rest of the country. The obvious hitch is that MTNL is a listed company and BSNL is not. BSNL employees were opposed to the very idea; there were other hurdles. MTNL is listed in India and on the New York Stock Exchange.

�It (merger) is not that simple. A whole lot of planning and analysis is required to weigh the pros and cons. There will definitely be some synergies but there has to be a long-term vision,� said KPMG executive director and head of telecom, Romal Shetty.

Both companies, he said, need to really work hard on branding and customer-centric services, to handle the increasing competition in the sector. The competition and falling rates had impacted all companies but BSNL and MTNL have been losing revenue and market share constantly.