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July 2, 2001
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Money > Business Headlines > Report July 2, 2001 |
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VSNL stake: BPL, Tatas to bid against each otherBaburajan K The Tatas and the BPL group will bid against each other for acquiring the 25 per cent government stake in Videsh Sanchar Nigam. This is despite BPL and the Birla-Tata-AT&T combine merging their cellular operations as part of a major consolidation move. Tatas have a 17 per cent stake in the merged cellular entity, a top Tata executive said. "We will not withdraw from the race for picking up a substantial stake in VSNL. We could join hands in some other areas, but not in the international long distance telephone segment," BPL Innovision Business group chairman Rajeev Chandrasekhar told Business Standard. To bid for the VSNL stake, the BPL group has already formed a consortium with the Madras-based Sterling group and other foreign investors. The consortium is in the process of doing due diligence and will be submitting the financial bid shortly. Tatas, which had mandated JM Morgan Stanley for the VSNL buyout, have partners like Tata Industries, Tata Steel, etc in their consortium. The group is in the fray alone. Analysts said that with telecom players pressing the government for a single licence to operate across all telecom services, inter-sector competition among partners in one line of business when they have agreed to merge in another, will fly in the face of the expected synergies in straddling all telecom businesses. "Until they reach consensus in other areas like national and international long distance telephone, basic and Internet services, confusion will arise on many occasions," an analyst said. Both the Tatas and BPL have interests in basic service operations. Though the BPL group has applied for 26 basic circles (13 each by BPL Mobile and BPL Cellular), the group has not yet got any licences from the government. The Tatas' basic services are already available in Andhra Pradesh. In addition to this, both BPL and the Tatas will continue to compete in the Internet marketplace with their own ISPs. Industry observers consider the ISP business as a value-added service for any cellular and national long distance businesses. Powered by YOU MAY ALSO WANT TO READ:
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