India's new communications minister Arun Shourie said on Thursday he wanted to study a controversial proposal to merge state-run telecoms giants MTNL and BSNL but added the government had a bad record in running big companies.

"In general in India, we're not able to manage mammoth organisations," Arun Shourie, who is also the divestment minister, said when asked about the proposed merger of Mahanagar Telephone Nigam Ltd and unlisted Bharat Sanchar Nigam Ltd.

Shares of MTNL have jumped since a Cabinet reshuffle on Wednesday in which Shourie replaced Pramod Mahajan as communications and information technology minister.

Mahajan was seen as favouring a merger between MTNL and BSNL. Analysts believe MTNL would be easier to privatise if the telecoms giants were not merged.

Shourie, in his first comments to reporters since taking over his new portfolio, said he needed time to study whether there would be any sales of stakes in MTNL and BSNL and did not fix any timeframe for reaching a conclusion. He said he had asked both for details about their market share and their competitiveness.

"I have also requested them to inform me about the handicaps they are facing and what steps need to be taken to remove them."

He said he wanted competition in the telecoms sector but added intense rivalries must not hurt balance sheets.

India's fast-growing telecoms sector is in the grips of an intense price war between cellular operators and companies providing cheaper limited mobility services.

"There must be competition. At the same time, there must not be predatory practices. India is large enough so there's room for everybody," he said.

"No steps should be taken to block technology," he added in an apparent reference to the less expensive limited mobility services being by provided four private groups and MTNL and BSNL.

Shourie also said he wanted total transparency in the way the communications department functions. "There must be the fullest transparency both in the formulation and implementation of policy and also in every transaction in the departments."

Switching to information technology, Shourie added India must focus on developing its computer hardware sector to allow it to match the global success of its booming software industry.

"It (hardware) is a very important focus area and it must reach the same levels of its software success."