Vsnl To Bid For Six Cellular Circles

Videsh Sanchar Nigam Ltd (VSNL) will bid to become a fourth mobile player in all the leading circles after Mahanagar Telephone Nigam (MTNL) and/or Bharat Sanchar Nigam (BSNL) is allowed as the third player.

VSNL would bid for circles where it already has a presence with its ISP operations. This would mean that VSNL is planning an entry into the cellular business in the six largest Indian cities.

When contacted, R S P Sinha, director-finance, said: "The VSNL board has taken up the issue and a final decision will be taken soon We are yet to decide whether to go in with a strategic partner for the cellular foray."

 

VSNL, which is the largest Internet Service Provider with a subscriber-base of about 4.5 lakh, is also planning for a national roll out of its ISP services. The board of directors has discussed the cellular issue at its meeting on Tuesday and will frame a final strategy soon to this effect.

It has approached the government to get a slew of concessions for the company's proposed foray into the cellular and third-generation services.

The government has already offered some sops for VSNL's national long distance foray in order to compensate the state-run firm when it gave up the monopoly over the international telephony in 2002. It is entering without any entry fee.

The company officials are confident that the government would take a favourable decision on concessions. The diversified projects will also help the company enhance its growth in total revenue as well as bottomline. The offerings on cellular, national long distance and the Internet services will also help VSNL become a one-stop solution for the domestic customers.

However, the Telecom Regulatory Authority of India (Trai) is yet to come up with detailed guidelines for inviting the fourth player and the revenue sharing ratio.

Though the number of cellular players in a circle is set to increase to three, and then four over a period 12 months, industry analysts say that there may not be room for a new player in these circles going by the current performance of mobile companies.

For instance, many of these cellular firms are yet to earn net profits even after completing four years of operations.