Financial Daily from THE HINDU group of publications
Monday, Jan 28, 2002
Financial Daily from THE HINDU group of publications Monday, Jan 28, 2002 |
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Info-Tech
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Telecommunications Corporate - Announcements Reliance to go ahead with NLD foray; VSNL bid alive G. Rambabu
NEW DELHI, Jan. 27 CLOSE on the heels of the entry of the first private operator in the national long-distance services - Bharti Telesonic Ltd - another big player is readying to give the incumbent Bharat Sanchar Nigam Ltd (BSNL) a run for its money. Reliance Communications Ltd, the telecom arm of the Reliance group, is expected to convert its letter of intent (LI) into a licence for operationalising its NLD services in the next couple of days. According to company officials, initially, the company wanted to hang on to its LI pending the disinvestment of Videsh Sanchar Nigam Ltd (VSNL), scheduled to be completed by February 15. Financial bids for VSNL are to be invited on February 1, following which the Government would shed 25-per cent stake in the company to one of the three contenders - Reliance, the Tatas and a consortium led by Sterling Cellular Ltd. However, there are clear indications that VSNL disinvestment may not be completed by this fiscal-end, especially after ModiCorp approached the Delhi High Court to stall the process. The first hearing in this case is to be held on Monday. ModiCorp (now SpiceCorp) had expressed interest in participating in the disinvestment process, much after the due date, a request rejected by the Department of Disinvestment. It thereafter approached the Delhi High Court, alleging foul play. Although DoD has expressed confidence that VSNL disinvestment will be completed by the scheduled time, Reliance does not seem to share the confidence. "The earlier plan was to acquire the NLD licence only after the VSNL disinvestment process is over. With Reliance having put in a bid, it would not have made sense to acquire both the NLD licence and stake in VSNL. VSNL has already applied for an NLD licence and it would have meant a waste of resources," the officials said. "However, time is running out. If we wait for the disinvestment process to be over, our LI might lapse, and we did not want to take a chance. Even if we are successful in our bid for VSNL, we will work out ways of merging the NLD operations of Reliance and VSNL," they pointed out. With Bharti Telesonic having already kicked off its operations on Republic Day, Reliance would be the second private player in this field once it launches its NLD services. The consumers can expect a further cut in the STD tariff rates which have already been brought down by close to 60 per cent. Reliance officials refused to speculate on the tariffs, but said that they were hoping to attract customers through their quality of services. The optical fibre network was already in place in many parts of the country and the remaining should be completed in the next couple of months, they said.
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