Financial Daily from THE HINDU group of publications
Friday, Jul 04, 2003
Financial Daily from THE HINDU group of publications Friday, Jul 04, 2003 |
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Telecommunications Info-Tech - Telecommunications France Telecom may disconnect from India G. Rambabu
NEW DELHI, July 3 CLOSE on the heels of Telia Sonera, and Vodafone, it now appears to be the turn of France Telecom to ease its way out of the country. In what could be an indication of its waning interest in the domestic telecom market coupled with its own financial woes, the global communications major has shut down its India office and relocated some of its existing staff. According to industry sources, the company has for the past couple of years not made any significant investments in India and has decided that it can do without a physical presence in the country, in keeping with the overall strategy to downsize its Asia-Pacific operations. This is part of the overall strategy of restructuring that the company is undertaking following its staggering debt of close to $60 billion, with more than $15 billion in debt payments due in 2003. For the time being however, it continues to hold on to its minority stake (26 per cent) in BPL Mobile, which offers cellular services in the Mumbai circle. In fact, France Telecom like many of the other global telecom operators, had made huge investment plans in India. These included plans to participate in the disinvestment of Videsh Sanchar Nigam Ltd (VSNL) and Mahanagar Telephone Nigam Ltd (MTNL). The company, which is one of the biggest mobile service providers in Europe, had also wanted to expand its coverage by acquiring a stake in many of the domestic cellular ventures. However, with the downslide in the telecom markets last year and its own 3G plans in Europe proving to be expensive, the company got itself neck-deep in debt. A restructuring plan was currently under way, and clearly India did not appear to be a lucrative market any longer, the sources noted. As and when it does pull out completely from the Indian shores by selling off its equity in BPL Mobile, the company will join the list of global operators who have pulled out of the country in the past couple of years. Notable among them being British Telecom, Telecom Italia, Telstra, Swiss Telecom, Hughes, Alltel Corp, Bell Atlantic, Bell Canada, Shinwatra, Bezeq, Telekom Malaysia, Jasmine International and Guangdong Lintech Ltd. More recently, Telia and Vodafone too have pulled out of the country having sold off their stakes to Bharti and RPG Cellular, respectively. The only big telecom investors that continue to be present are SingTel, Hutchison, First Pacific, Distacom, TIW Canada, France Telecom, Vodafone, CellNet, Century Telephone and Verizon. While Hutchison Whampoa has a 49 per cent stake in Hutchison Telecom, First Pacific, Hong Kong has an equal stake in Escotel Communications Ltd. Distacom has a 42 per cent stake in Spice Communications, AT&T Wireless (33.3 per cent) in Idea cellular, TIW, Canada (30 per cent) in Shyam telecom, SingTel (27 per cent) in Bharti Tele-Ventures, Cellnet, US (11 per cent) in RPG Cellular, Century Telephone (10 per cent) in Aircel and Verizon (10 per cent) in Reliance Telecom.
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