It is understood that Hughes Tele. Com , the fixed line operator for the state of Maharashtra, and Tata Teleservices, its counterpart in Andhra Pradesh, are in discussions over the possibility of consolidating their businesses.

The consolidation, if it does happen, will be a win-win situation for both players. For Hughes Tele.com, which has been restricted to the state of Maharashtra, this move to merge would take it on a national level. For the Tata Group the merger would give it access to the highly lucrative Mumbai commercial market. Mumbai accounts for almost 30 per cent Indias telephony revenues.

Hughes Tele. Com has the first mover advantage in the high density Mumbai market where it has already wired up more than 4,000 commercial buildings in Indias commercial capital and claims to have most of Indias top corporates as its customers. Tata Teleservices, which has already established its foot print in the state of Andhra Pradesh, is keen to expand operations to south India, Delhi, Punjab, Haryana and Rajasthan.

Further, the additional incentive is that the combined basic services business, depending on the final shape it takes, would gain a ready stock exchange listing as Hughes Tele.com is already a listed company.

The merger would also be effective in realising the Tata Group''s ambitious plans to offer broadband services in Mumbai with the help of the "last mile" connectivity provided by Hughes Tele.Com.

Hughes Tele. Com has close to 90,000 subscribers, while Tata Teleservices has about 75,000 subscribers in Andhra Pradesh and both players are in an aggressive roll out mode across the respective state Capitals.