Sinha said that the consultant had already submitted its report to the government, adding that the issue had been under consideration.

Sinha said that since BSNL and MTNL had been owned by the government, a need was felt that merger between the two would give more operational synergy.

While BSNL is fully owned by the government, MTNL is a listed company. The capital structure of both the companies are different, he said.

About expansion of mobile services, Sinha said BSNL is incurring an expenditure of Rs 7500 crore (Rs 75 billion) in setting up base transmitter stations and for purchase of equipment.

BSNL has a mobile subscriber base of 14 million nationally Sinha said, adding that the target is to increase it to 25 million by March 2006.

Sinha said that once the optimisation of the network was over, mobile services would become better, he added.  Sinha said that except in Mumbai and Delhi, where MTNL's services are available, BSNL is the largest operator in the country.

Asked about the rate of growth of fixed line connections, Sinha said that the rate of surrender was higher than the number of new lines given. However, he said that there was demand for fixed line phones in the rural areas.

Sinha said that this is a common phenomenon worldwide. The BSNL chief said that revenue per fixed line for the company was falling, adding that this decline is compensated by the growth in mobile and broadband services.

BSNL was also earning revenue from inter-connect charges and selling enterprise solutions. Sinha said that BSNL is aiming to achieve a turnover of Rs 38,000 crore (Rs 380 billion) in the current financial year, higher by Rs 2,000 crore (Rs 20 billion) over the last fiscal.

About broadband services, Sinha said that although the target was to give one lakh connections by December 31, 2005, BSNL would be able to give half of that during the period.