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May 4, 2001
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Money > Business Headlines > Report May 4, 2001 |
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Reliance likely to bid for MTNL stake tooBaburajan K The Reliance group, after pitching for Videsh Sanchar Nigam, is now eyeing public sector Mahanagar Telephone Nigam, which, too, is slated for privatisation. The government has proposed around 30 per cent sell-off in MTNL, in which the it currently has a 56.25 per cent stake. However, a final decision has not yet been taken. Anil Ambani, vice-chairman and managing director, Reliance Industries, said: "Reliance will look into the issue of bidding for MTNL for a possible stake buyout. Let the government first come out with the privatisation plan, we would take a decision only after that." "However, as a matter of policy, I cannot comment on the acquisition and investment plans of the group," Ambani said on Monday. The department of divestment is likely to finalise the sale of government stake in MTNL in this fiscal. The government is planning to induct a strategic partner and keep its own stake at 26 per cent. Reliance Infocom has plans to invest in the domestic cellular and basic circles by bagging new licences. MTNL offers cellular and fixed line telephone services in New Delhi and Bombay, and in addition also has an ISP business. A strategic investment in MTNL will result in the entry of Reliance into two lucrative metro circles in the country. Though, MTNL is a new comer in the cellular business, the company has been enhancing its cellular subscriber base challenging the private mobile operators. Its proposed overseas telecom ventures in association with strategic partners would be an additional attraction for any strategic investor. However, the huge workforce is a cause for concern, analysts said. A section of the MTNL staff, however, has voiced protest against the possible divestment. The gameplan of the Reliance group is to enhance its footprint in the country eyeing a substantial share in the telecom market, which is expected to be worth Rs 1000 billion over the next five years. Reliance Infocom, which is connecting India with a national optic fibre backbone, is planning to invest Rs 250 billion to roll out the services. Powered by YOU MAY ALSO WANT TO READ:
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