No plans to divest govt equity in BSNL
Thursday, 10 October 2002, 19:30 IST
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NEW DELHI: Bharat Sanchar Nigam Ltd. (BSNL), India's largest telephone company, will continue to function as a public sector entity and there are no plans to divest the government's stake, said a top official of the company. "All plans are on hold now. BSNL will remain a government entity for quite some time," said Prithipal Singh, chairman and managing director of BSNL. Singh said no proposals has so far been finalized to dilute the government's stake in the telecom behemoth. The ministry of disinvestment has reportedly identified the newly corporatised BSNL as a potentially big-ticket target for divestment. The government currently holds the entire equity in BSNL after the erstwhile Department of Telecom Services and Department of Telecom Operations were converted into a corporate body on October 1, 2000. While the idea to disinvest BSNL is still at a nascent stage, the government has reportedly started processing the case to draft a proposal for the consideration of various administrative agencies concerned. BSNL operates telephone services in all parts of the country except Mumbai and New Delhi. The company has recently announced an aggressive foray into India's booming mobile phone services industry. Meanwhile, BSNL plans to call off its existing agreement with Videsh Sanchar Nigam Limited (VSNL) to take the latter head on in the bandwidth-on-demand market. As per plans, BSNL will no longer depend on VSNL, a major player in the international telephony market, for bandwidth, said Singh. The newly privatized VSNL happens to be BSNL's competitor in the bandwidth and other services market. "Our network has the capacity to handle 80 terra bits of data transmission. One million people can call at a time," Singh said, adding the final decision awaits the government approval. VSNL is a leading player in the telecom market both as an infrastructure provider and a service provider, competing with Internet service providers. With its monopolistic price mechanism, the company had earlier made it difficult for most players to survive the competition. New Delhi-based BSNL has significantly boosted its bandwidth capacity by commissioning a 9,000-km fiber optic network connecting 14 major commercial cities including the national capital, Mumbai and Bangalore. The network, which will spread to 60 cities in its second phase, has the capacity to carry one million simultaneous voice calls, up from the existing capacity of 30,000 voice calls. BSNL plans to make bandwidth available on demand for commercial use. With bandwidth prices coming down worldwide, Singh said, BSNL would go for further price cuts in the commercial bandwidth market. BSNL already has tie-ups with private players Bharti Tele-ventures and Data Access, which sell international bandwidth to the state-owned telecom giant through trans-Atlantic cable routes.
Source: IANS
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