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Govt to accept VSNL bids from Jan 26

The government, set to abolish state monopoly over overseas telephony this April, will start accepting later this month applications from companies planning to enter the sector, the telecoms minister said on Monday.

The government has already announced plans to end Videsh Sanchar Nigam Ltd's monopoly over the international long distance business on April 1 and throw it open to unlimited private competition.

"We're going to invite applications from the Republic Day. I hope people come in good numbers," Pramod Mahajan said at the launch of a pre-paid mobile service of state-run Mahanagar Telephone Nigam Ltd.

The minister said the government had already finalised the draft licence agreements for private firms eyeing the overseas calls business, giving them more than two months to prepare their entry plans.

The overseas calls business will be the last telecom sector to be opened up to private competition. Over the past two years, the government has liberalised the fixed-line and the domestic long-distance businesses.

But before this overseas telephony is also liberalised, the government plans to complete privatising the New York Stock Exchange-listed VSNL by selling a 25 per cent stake with management control to a strategic partner.

It has set February 1 as the date for accepting price bids from prospective suitors.

"On April 1, VSNL's new management will face up with new international long distance operators from day one," Mahajan said.

Last November the government set entry fees of Rs 250 million and bank guarantees of the same amount for private firms keen to enter the sector, accepting suggestions on entry rules made by the country's telecoms regulator.

While the government had accepted most of the regulator's suggestions, it rejected one which required fixed-line companies to route calls to international gateways through a national long-distance operator.

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