Bharat Sanchar Nigam Ltd has started talks on synergising operations with Mahanagar Telephone Nigam Ltd, which offers telecom services in Delhi and Mumbai.
The first area that has been identified is the high-margin enterprise business.
The move could be a precursor to the merger of the two state-owned companies.
BSNL runs fixed line and mobile services throughout the country, except in Delhi and Mumbai.
For the first time, BSNL will also open up its tower base to private players to generate a new stream of revenues.
It has about 40,000 towers all across the country.
"We have signed initial agreements with many private players for renting out towers. It will help us increase revenues," BSNL chairman and managing director R K Upadhyay told Business Standard.
He, however, refused to share the details.
The move to rent out towers is in BSNL's interest, as there are already several infrastructure providers who will lease out towers to the telecom players, if not BSNL, he said.
The development is significant as BSNL has towers in remote areas that could be used by other companies to expand. Most new operators are not looking to invest in towers, while most incumbents such as Bharti Airtel and Vodafone-Essar have spun off tower businesses.
To gain market share and improve revenue, BSNL has decided to focus on four areas mobility, broadband, enterprise business and infrastructure sharing (leasing).
"We have started discussions with MTNL to exploit synergies for mutual benefit.
For instance, there can be rationalisation of traffic," he said. He did not rule out merger.
"The merger of BSNL and MTNL can be considered, but only at a later stage," he said.
The department of telecommunications has been considering such a move for two-three
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