MTNL, BSNL mull foray into foreign markets

The lure of foreign shores seems to have become irresistible to Indian telecom companies. State-owned telecom majors Mahanagar Telephone Nigam (MTNL) and Bharat Sanchar Nigam (BSNL) are set to join the bandwagon, to take the number Indian companies setting up offshore operations up to four.

The other two are Bharti Tele-Ventures and the Tata group-controlled Videsh Sanchar Nigam (VSNL).

MTNL has mooted a plan to set up operations in Sri Lanka and is also exploring investment opportunities in Africa and Saarc countries.

The company has already sent a high-level team to Colombo to study the market there, while it is waiting in the wings to commence data and basic telephony operations from the island nation.

An MTNL official said the company is looking for partnerships in Sri Lanka and intends to set up operations jointly with the local companies there, or go alone provided regulations are conducive to it.

The Sri Lankan foray will make MTNL have a strong presence outside the country and help it "gainfully deploy"its over Rs 2,000 crore cash reserves.

At present, the public sector telecom giant has operating interests in two companies in Nepal and Mauritius.

BSNL, too, is firming up its Sri Lankan plans. The company is in the process of laying a submarine cable between India and Sri Lanka, and once it is completed, BSNL will look at offering basic telephony services or data services in Sri Lanka.

"We are looking at various countries including Sri Lanka, but nothing has been finalised yet," a top company source said.

The PSU, which already had ventured into Nepal, is also looking at entering South Africa and Pakistan markets, as well.

According to industry analysts, MTNL's move is spurred by reasons such as high competition, fall in earnings and expectations of a growing global telephony market.

The company is looking at growing to other geographies, as rules prevent it from venturing into other locations in India. As for BSNL, it is the capacity utilisation that lies unused, while the stress is to gain the first-mover advantage in newer geographies.

Bharti Enterprises had made its offshore foray way back in 1997. The company, through its subsidiary Bharti Global, had won a licence for telecom operations and invested over $25 million in Telecom Seychelles that offers basic telephony, GSM cellular services, long-distance and international telecom services.

VSNL has acquired the second network operator licence in South Africa, while it had signed up with Singapore-based companies for last mile operations in the country.