Ratan Tata Set To Join Vsnl As Non-Executive Chairman

Ratan Tata will join the board of VSNL as non-executive chairman, while present chairman and managing director S K Gupta will continue as the managing director.

The Tata group today named four directors on the VSNL board, following the formal transfer of management control from the government to the Tatas.

N Srinath, CEO of Tata Internet and R S P Sinha, finance director of VSNL, are the other two nominees.

Srinath will be the executive director. However, Sinha has declined to join the revamped board, citing personal reasons. The group is yet to name a replacement.

"We will finalise the synergies of Tatas and VSNL within a week's time as per our integration plan. There are no plans to change the name of the company and there will be no voluntary retirement plan for the employees of VSNL," Ratan Tata said at a press conference after signing the shareholder's agreement between the Tata group and the central government.

 

He said the group was hopeful of completing the merger of Birla-Tata-AT&T with BPL Communications to become one of the largest cellular companies in the country.

The VSNL acquisition catapults the Tata group into a leading position among private Indian telecom players.

With a 100 per cent share in the lucrative ILD business, a leading share in Internet services and a favourable national long distance licence, VSNL preferably fits in with the group's plans of providing intergrated telecom solutions, Ratan Tata said.

The acquisition provides an ideal opportunity for the Tata group to integrate its basic and cellular business with VSNL's presence in the ILD, ISP businesses and its imminent foray into the NLD space, company executives said.

The acquisition could cost the Tatas up to Rs 2,590 crore, including the cost of an open offer to buy a further 20 per cent stake from VSNL's public shareholders. The Tata group has handed over a cheque to the Centre for the 25 per cent stake.

Addressing the press, Pramod Mahajan, Union minister of communications and information technology and parliamentary affairs, said the virtual monopoly of VSNL in the ILD business will stay upto two years though its real monopoly will end on April 1, 2002.

"From April 1, I hope there will be more freedom in terms of services and costs for the subscribers. Services like internet and international telephone calls will be freely available," he said.