Nynex-Bell To Go On With Basic Telecom Ventures

The US telecom giant has reportedly decided that the two projects will be handled by two separate divisions within the company.

The two baby bells had merged their American operations only. The international businesses will remain as they are, a source said.

The decision ends speculation in the telecom industry about the future of the joint venture projects. There was apprehension about whether two projects with different partners in the country would fit into Nynex-Bell Atlantic's business strategy, apart from the problem of raising the huge capital required for the projects.

Nynex-Bell Atlantic never had a problem with the finances. They had to just decide on what their India strategy would be, another source added. The second largest US telecom company will help each of its Indian projects raise finances from the US market.

However, it is still not clear whether the department of telecommunications will clear the telecom projects.

The merger of the baby bells had created a tricky situation in which the same foreign company is the partner in two consortia.

The basic telecom services tender conditions state very clearly that a company cannot be partner in more than one consortium. DoT has in the recent past questioned at least one change of partners in telecom service consortia citing this particular tender guideline.

Therefore, being a partner in both Reliance Telecom, holding the letter of intent for Gujarat, and Essar Commvision, with the Punjab LoI, Nynex-Bell Atlantic may still run into regulatory problems with DoT. When contacted, a senior DoT official said that the department had not taken a decision on the matter yet.

However, telecom sources do not expect this technicality to create problems for the Indian ventures. The bids were made before the merger and the two companies (Nynex and Bell Atlantic) were separate entities then. So, DoT cannot have objections to the changes now, the source added.