The Union government has asked Mahanagar Telecom Nigam Ltd to explore opportunities that would enable the company to expand its presence and improve financial conditions.

"The government has asked MTNL to work on plans for expansion including entry into other circles, which will help in improving its financial status," Union IT, Telecom and Divestment Minister Arun Shourie told reporters in Mumbai on the sidelines of Maruti Udyog Ltd's roadshow.

"MTNL operates in two circles in India and has a presence in Nepal and a similar kind of expansion is what the telecom firm is asked to opt for," the minister said.

The MTNL board headed by chairman and managing director Narender Sharma was probing the possibilities of an expansion and a decision was expected "soon", Shourie said.

Talking about Bharat Sanchar Nigam Ltd, he said the operator was "doing well", as the company also provides cellular service, and added that the government would also like MTNL to reap profits.