Vsnl Shelves Nld Project Plan In Kenya

Videsh Sanchar Nigam Ltd (VSNL) has dropped out of its plan to set up a national long distance (NLD) telephony project in Kenya.

The NLD project in Kenya was to come up in association with the Mahanagar Telephone Nigam Ltd (MTNL) and the Telecommunication Consultants of India Ltd (TCIL).

Lack of viability of the NLD project prompted the partners to take a decision to withdraw the Kenya plan, said a VSNL official. The proposed investment in the venture could not be ascertained.

According to RSP Sinha, director (finance), VSNL, though the company has dropped out of the Kenya project, it will scout for more ventures abroad in the basic and national long distance telephony segment as part of its expansion plans.

The VSNL-led consortium had planned to set up the joint venture in association with a partner in Kenya with a minority stake in accordance with the long distance telephone regulations in Kenya. They were to hold equal stakes in the NLD project.

The consortium was in advanced stage of negotiations with the local partner and was to form the joint venture after bagging the NLD licence.

The objective of the partnership was to bag at least one NLD licence in that country. Following the decision to shelve the venture, the consortium is now eyeing countries such as Bangladesh.

VSNL, MTNL and TCIL had recently set up a basic telephone project in Nepal in association with a local partner.

Last year, the Union government allowed these state-run companies to form a consortium to address the overseas market through joint ventures. However, the equity holding of the joint venture firms to be set up in these countries will depend on the prevailing telecom regulations.

Earlier, MTNL and VSNL were also planning to float a joint venture to offer NLD services in the country, but the project did not take off. Lately, VSNL decided to go it alone in the project with an investment of Rs 2,000 crore, while MTNL is seeking a partner.