The company paid an interim dividend of 20 per cent amounting Rs 70.87 crore (Rs 708.7 million) to the government.
"Nobody is against the merger per se. But if one company is made a subsidiary of the other, the idea behind the synergy would fail. Opting for the subsidiary route is not going to deliver the desired results of synergy, cost reduction and unified command," RSP Sinha, MTNL chairman and managing director said.
"MTNL is a listed company and it will have to maintain an arm's length distance with the holding company," he said and added that be it forward or reverse merger, it should be given preference as an option.
According to him, when a merger took place, the fear of one company's asset being used by the other does not arise as there would be there will be a unified command.
"It is better that steps are taken to ensure the merger provides synergy and enhances shareholder value", Sinha said.
ICICI Securities, the consultant appointed by the government to work on synergising the operations of the two telecom PSUs, will present final report of Phase-1 to the merger panel constituted by department of telecom on February 28.
MTNL would float a tender of four million lines next week for next generation 3G services, approximately to the tune of Rs 400 crore (Rs 4 billion).
"We will float a tender for four million (two million each in Mumbai and Delhi) next week for 3G services as we propose to roll out 3G services by the end of this year, and the investment would be 20 per cent of its overall capex of Rs 2,000 crore (Rs 20 billion)."
"We are going to place another order for eight million GSM lines to add capacity because with the pace of growth of our GSM service, we want to be up and ready by June 30 when our earlier expansions gets completely exhausted and we do not have to face capacity constraint", he said.
MTNL market share in Delhi moved up to 8.11 per cent at the end of January, 2005 from 5.11 per cent in February last year, while in Mumbai its market share stands at 9.97 per cent, he said adding, "We took aggressive decisions last year and results are here for everyone to see."