Mtnls Euroissue May Get Caught In Traffic Jam Of $50b Telecom

Mahanagar Telephone Nigam Ltd (MTNL)s plans to raise money internationally may run into a $50 billion traffic jam of telecom issues which are slated to hit world markets in the next three months.

A string of issues, including the $15 billion Telecom Italia and the $12.5 billion Telstra, have already scheduled international debuts between now and early December.

The rush to raise money has been triggered by a combination of factors, including the liberalisation of the European telecom market next year.

Amongst the most ambitious offerings are Telecom Italia formerly known as STET, Telstra, and the $8 billion Tele Denmark issue.

 

Another issue which may crowd the field is the $7 billion - $8 billion offering by France Telecom. The issue was put on hold after the Socialists unexpectedly won the French election. But, the government has been hinting that the company could come to market later this year. Also from Europe is Portugal Telecoms $2 billion issue which is scheduled to hit the market by November.

MTNL has not indicated when it will tap the market, but it will be picking its lead managers during the next few days. The indications are that it plans to hit the international market after September.

A number of jumbo-sized issues are also on their way from Asia, including China Telecoms $800 million global and Smart Telecom - of the Philippines - which hopes to raise around $450 million. Several other Asian companies, including Korea Telecom and Pakistan Telecom, are planning issues but have not finalised them yet. Another giant issue still at the planning stage is Australias Optus which is considering a $6 billion - $7 billion issue.

Telecom analysts in London predict that investors confronted with so many choices, will turn choosy. However, they say that some companies will not find it hard to pick up the cash companies to pick up the cash. Says James Ross of Hoare Govett: If a company has a large domestic market then it should not be difficult to get the money. MTNL is, of course, in a different situation but nonetheless the issue is expected to be received well.