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Tatas decide to go solo for VSNL

Baburajan K

The Tatas have decided to go it alone in its bid for a controlling stake in the state-owned Videsh Sanchar Nigam, ruling out a tie-up with the BPL group.

Tata executives said: "Though BPL will be a strategic ally in our cellular venture, it will not be a partner in our VSNL bid. We have decided to go it alone and a consortium of Tata group companies would be submitting the financial bids for VSNL."

Officials from both the groups said that earlier some informal talks had been held, but no formal negotiations had taken place.

Recently, BPL made attempts to submit its bid alone. However, the Centre is yet to take any decision on accepting the bid from the company. BPL Communications' official spokesperson declined to comment on the issue.

The Tata group had earlier kept its options open on roping in a strategic partner for the bid. Even BPL, which had pulled out of the Sterling-led consortium for Videsh Sanchar Nigam, had said it could look at tying with any other contenders for VSNL.

Earlier, senior BPL executives had said that the group was exploring possibilities of whether it could partner the Tatas for VSNL as well. The two have signed an agreement to join hands in the cellular business.

The Tatas, the Reliance group and the Chennai-based Sterling-Thaicom consortium are in the final race to pick up the government's 25 per cent in VSNL.

According to analysts, BPL could set up its own facilities to offer international long distance calls after the opening up of the sector for private companies in the next fiscal.

For BPL, cellular, ILD and national long distance businesses are the core businesses identified. The government is expected to invite financial bids from the three players by the month-end.

As the Centre will throw open the Rs 70-80 billion ILD market for private players from April 1, 2002, analysts are cagey about the valuation of VSNL.

The company's stock price had already been affected by Centre's announcement on internet telephony and international long distance policy.

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