The Hindu Business Line : MTNL readies Rs 500 cr for overseas operations

The state-owned Mahanagar Telephone Nigam Ltd has readied a war chest of Rs 500 crore for international operations, including acquisitions and bidding for new licences in developing countries in the current financial year.

A part of this investment will also be used to set up its international long distance telephony infrastructure, including an undersea cable project with Bharat Sanchar Nigam Ltd.

According to Government sources, MTNL could also be eyeing acquisitions in the domestic market in which case the investment fund could be increased.

Expanding footprint

The move is part of MTNL’s strategy to move beyond Delhi and Mumbai. The company has not been allowed by the Government to set up services in any other parts of the country, which puts it at a disadvantage compared with other telecom majors such as Bharti Airtel, Vodafone Essar and Reliance Communications.

While these private operators are adding over one million subscribers a month across the country, MTNL gets only a few lakh new subscribers from the highly saturated markets of Delhi and Mumbai.

The company’s profits have been dipping in recent years. Therefore, the company is now looking to expand its footprint outside the national boundaries.

Overseas forays

It has already entered Mauritius and Nepal and is now looking at other developing countries in Africa and Asia. MTNL had recently bid for licences in Kenya and Saudi Arabia.

Other Indian operators have also been on the look out for acquiring new licences in foreign countries. Reliance Communication and Bharti Airtel have also been bidding for licences in countries such as Saudi Arabia and African countries.

BSNL is also keen to invest in international markets especially in the managed services segment. But, so far, the Indian telcos have not had many successes with aggressive bidding by foreign players. For instance, Kuwait Telecom had bid a $6.1-billion for one-third mobile licence in Saudi Arabia.

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