BSNL-MTNL to ready ILD venture by March

Strengthening their presence in the international long distance telephony segment, state-run telecom companies BSNL and MTNL are likely to finalise the proposed joint venture company for setting up a submarine cable link before this fiscal.

Even as the exact shape of the proposed JV is still being worked out, sources said it would be a 50:50 venture between the two PSUs and will be finalised before March 2006.

As of now, the PSUs are using the infrastructure provided by VSNL, Reliance and Bharti to route their international traffic. BSNL already has an ILD licence, but is yet start operations on its own, whereas MTNL is yet to get an ILD licence.

The new entity would undertake activities such as issuing of tenders, awarding of contracts, operation of the undersea cables, among others.

As part of the move, the PSUs are also looking forward to have their own infrastructure and foray into the ILD call market, which is worth Rs 4,200 crore (Rs 42 billion).

BSNL has already charted out its plans to enter the ILD sector by 2006. It would prefer to have its own independent ILD network, which would facilitate further lowering of its tariffs.

BSNL has signed a deal with NEC Corporation of Japan for a 320 km undersea cable, connecting Tiruchendur in southern Tamil Nadu and Colombo in Sri Lanka.

It is now looking at the India-West Asia and India-Singapore undersea cables, which will be taken up under the first leg of the JV. The Chennai-Singapore and Mumbai-Dubai cable projects are slated to be made operational by 2008. The project is estimated to cost over Rs 1,200 crore (Rs 12 billion).

BSNL and MTNL stand to benefit by installing their own infrastructure as all major international cables, with surplus capacities, have landing stations at Dubai, Singapore and Colombo.