VSNL to roll out services in S Africa early next year

To look at value additions through acquisitions

Internet and telephony major Videsh Sanchar Nigam (VSNL) is all geared up for the rollout of its telephony services in South Africa and expects it to go on stream by the first quarter of 2006.

The Tata group will be operating its services through a telecom firm - second national operator (SNO) - and is planning to introduce its fixed wireless phones (FWP) in that country.

"We will roll out our telephony services in South Africa by the first quarter of next year, which will be operated through a special purpose vehicle (SPV) - strategic equity partner company (SepCo)," chairman Subodh Bhargava told Business Standard here today.

On the sidelines of the Telecom & Broadband Summit 2005, Bhargava said the company will start the rollout of its telecom services from Johannesburg and later to other places in the country.

However, he did not divulge the expected number of subscribers nor the investment earmarked for the country.

The company intends to operate through a special purpose vehicle (SPV), Strategic Equity Partner Company (SepCo), which was rolled out by the consortium that owns SNO.

The consortium partners in SNO include Eskom Enterprises, Transtel, Nexus Connexion, CommuniTel and two consortiums, with Tata group as its controlling stakeholder.

The South African initiatives will be undertaken by Tata Africa Holdings, the investment arm of Tata group in South Africa and this provides VSNL an access to the country's market that was dominated by a monopoly player, Telekom.

The company is also looking at reducing international private leasedline circuit (IPLC) prices and adding more values to its subscribers both in the IPLC and retail broadband circuits, he said.

VSNL would also look at value additions by way of acquisitions and "will go in for the kill if the right opportunity emerges".

On the lighting up of the consortium cable, SEA-ME-We-4 in which VSNL is investing over $40 million, Bhargava said it would happen by the end of this year.