India's telecom majors

The telecom majors in India have been indulging themselves in major deals in the recent past. The Bharti Airtel - MTN merger deal (a matter that is yet to be sorted out by the Ministry of Finance) has sent shock waves amongst the establishment in the North Block on the convertibility of the rupee. If not now, this devil will pop up yet again and this time the Ministry of Finance should resist and use its good offices with the Reserve Bank of India to prevent "piece-meal regulation" - something the RBI has been indulging in for way too long.

On a completely different note, the state run BSNL has made its intention of listing itself on the stock exchange. In what is seen as a major organizational shuffle, about 200,000 employees of BSNL are being shifted to a new organization the National Optic Fibre Authority who's job is to lay optic fibres across the country and lease it out to telecom service operators. This will reduce BSNL's wage bill by about 12,000 crores (1crore = 10 million).

This restructuring process is essential for a company that might book its first ever loss since its inception in 2000. Furthermore, before listing itself on the exchange, BSNL needs these reforms to improve its balance sheet before the IPO. However, the politics of disinvestment by the government and using the market to discover the price for disinvestment will be interesting to watch as they play out.