ICICI Securities, which submitted its first report to DoT last month, is believed to have suggested making MTNL a subsidiary of BSNL with the former retaining an independent board.
"This suggestion does not give any benefit or result which was visualised in case of merger as these two companies will remain separate entities and will have to maintain an arm's length distance," R S P Sinha, chief managing director, MTNL said.
"This is because MTNL is a listed company at domestic bourses as well at New York Stock Exchange," he added. Sinha also said that MTNL and BSNL are complementing each other's operations.
"We are not competing with each other", he said. Opting for the subsidiary route is not going to deliver the desired results of synergy, cost reduction and unified command, he said.
DoT has convened a meeting with all the stakeholders and the consultant on March 21 to discuss the future course of action on basis of options given by the consultant.
ICICI Securities has short listed four options for the proposed process, according to the first report of the bankers.
The options are merger of two PSUs or making one a subsidiary of the other based on a 5-point criteria -- competitive position, shareholder value, cost implication, execution difficulties, including where the funds will come from and time period.