Another debate on VSNL, BT-MCI tie-up

NEW DELHI, April 30: In less than two weeks the Full Telecom Commission is slated to meet again on May 5, to discuss the proposal for a str...

NEW DELHI, April 30: In less than two weeks the Full Telecom Commission is slated to meet again on May 5, to discuss the proposal for a strategic alliance between the Videsh Sanchar Nigam Ltd (VSNL) and the British Telecom (BT)-MCI to set up a transit hub in India for transmitting call traffic originating from South-East Asia. B K Syngal, chairman and managing director of the VSNL, had made a presentation of the proposal to the Full Telecom Commission on April 21, when the commission had deferred a decision on the proposal for want of more details on the project.

According

to highly placed sources, even if the proposal obtains clearance in the meeting scheduled for next week, Minister for Communications Beni Prasad Verma is liklely to vet it with a great amount of circumspection as it involves several sensitive issues. These highly placed sources also claim that the chairman of the telecom commission, A V Gokak has several reservations about the proposed strategic alliance.

What has raised eyebrows in official circles is that the Full Telecom Commission is deliberating on the proposal for the second time in 13 days when normally the Commission meets once every four to six weeks.

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The strategic alliance between BT-MCI and VSNL proposes an equity structure which would have 40 % VSNL stake, 40 % BT and 10 % each of the MCI and financial institutions’ stakes. The project involves an investment of Rs 1,790 crore of which Rs 890 crore is expected to go towards setting up of submarine links, Rs 570 crore towards terrestrial links, Rs 290 crore on network equipment and Rs 40 crore on network management.

The presentation made by the VSNL had come in for some sharp criticism last week from members of the telecom commission for lack of details on the proposed joint venture. The Full Telecom Commission has secretaries from the ministries of finance, planning, industry and electronics as its ex-officio members apart from the telecom commission chairman and other members of the telecom commission.