The Indian government is working on a plan to merge ailing state-owned telecoms operators BSNL and MTNL.

There has been talk of a tie-up between the two operators for many years. The debate has intensified in light of their increasingly weak performances recently, something the state is keen to address.

India's communications ministry has drafted a note regarding the merger and sent it to communications minister Ravi Shankar Prasad for his approval, the Hindustan Times reported on Wednesday.

The paper's unnamed sources added that the draft was prepared due to the telcos' weak results in the most recent financial year; in 2013-14 BSNL is estimated to have turned in a net loss of 70.8 billion rupees (€865 million) and MTNL INR19.1 billion (€233 million), they said.

The pair have seen their market shares plummet in recent years too.

At the end of March BSNL - or Bharat Sanchar Nigam Ltd, to give the company its full title – had 94.6 million mobile subscribers, giving it a 10.5% share of the market, according to the Telecom Regulatory Authority of India (TRAI). It is the country's fifth-largest mobile network operator. Just over five years earlier, at the end of 2008, the telco was the market's fourth largest player, with 46.2 million subscribers and a 13.3% share.

Smaller player MTNL (Mahanagar Telephone Nigam Ltd), meanwhile, has shrunk to almost nothing, its 3.4 million customers giving it 0.37% of the mobile market at the end of March. At end-2008 it served 4.2 million customers and had a market share of 1.2%.

BSNL has also struggled in the fixed line sector, seeing its shares of a shrinking market decline as rivals like Bharti, Reliance and Tata have eroded its position. There were 28.5 million fixed-line connections in India at the end of March, down from 37.9 million at the end of 2008; BSNL's fixed market share has fallen to 64.9%, from 77.8%. MTNL has fared slightly better, its customer base remaining flat at around 3.5 million.

In the past few days the communications minister has been vocal in his criticism of the two telcos from a quality perspective too.

"Discussed strategy for revival of