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May 3, 2001
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Money > Business Headlines > Report May 3, 2001 |
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VSNL basic services plan for Delhi, Bombay rejectedBS Bureau Videsh Sanchar Nigam Ltd's plans to offer basic services has crash landed with the government rejecting the public sector undertaking's applications to provide services in Delhi and Bombay. According to top sources in the government, VSNL is not eligible to offer basic services as the policy guidelines for basic operator stipulates that two companies having the same promoter - the government in this case -- cannot offer basic services in the same circle. Since government-controlled BSNL is present in 19 circles and MTNL is already offering basic services in Delhi and Mumbai, VSNL's application for offering basic operations is technically invalid. Offering basic operations was one of the new business opportunities which the PSU was planning in order to compensate for the early end of its monopoly in international long distance. VSNL will, however, bid for the fourth operator's berth in all the four metro circles. Sources said the decision to bid for cellular operations essentially was influenced by the growing trend of consumers moving towards wireless applications. VSNL shareholders okay compensation The VSNL shareholders, amidst protests, have approved the Centre's compensation package to the firm as part of terminating its monopoly in international voice telephony business next year. A section of the shareholders at the EGM on Wednesday termed the compensation package as inadequate. As per the compensation package, the Centre would pay to VSNL a sum equal to the amount paid by VSNL as entry fee and licence fee for rolling out national long distance telephony services for a period of 5 years commencing from April 2001. Performance bank guarantee of Rs 4 billion for the roll-out will be waived. The government will also consider additional compensation if found to be necessary on a detailed review when undertaken. Powered by YOU MAY ALSO WANT TO READ:
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