MTNL has informed the telecom department (DoT ) to sell a 50% stake in wholly-owned unit Millennium Telecom (MTL) to BSNL, likely by July 2015, The DoT has given approval to create an equally owned joint venture for the Digital India services mandate with BSNL, but an official confirmation from BSNL is still pending because some matters need to be sorted out before the merger comes to its final shape, like the salary issues and debt on MTNL books.

Digital India mandate is an opportunity to earn Rs 92,000-crore annual revenue for both BSNL and MTNL, if they jointly deliver services in India.

Currently MTNL operates only in Delhi and Mumbai whereas BSNL offers services in rest of the country.

The main concern behind this merger to avoid net loss for both BSNL and MTNL and raise their market value. The market share of BSNL has been reduced to 12.3% at the end of May 2014 from 13.27% at end of March 2012 whereas that of MTNL stood at 4.83% at May-end, 2014.

Millennium Telecom, which was floated more than a decade ago by MTNL to offer value-added services (VAS), is currently delivering cloud-based services to the National Highways Authority of India and building internal communication links for Air India and also engaged in digital literacy initiatives in Jammu & Kashmir.