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BSNL not to acquire Zamtel stake
Mumbai: After drawing criticism from the Sam Pitroda committee, which was set up to recommend an overhaul of Bharat Sanchar Nigam's (BSNL) operations, the state owned operator has dropped its plan to acquire a majority stake in Zambia Telecommunications (Zamtel). The telco will, instead, focus on improving domestic operations, reports Economic Times.
The last date for submitting the binding bid for Zamtel is March 13, but BSNL is not pursuing the matter. "Its proposal is unlikely to be approved by the Department of Telecom (DoT) because Zamtel is a loss-making entity and BSNL needs to put its own house in order before buying a bleeding company," an official involved in the due diligence for Zamtel told Economic Times.
According to sources, BSNL requested Zamtel to extend the last date for submitting the binding bid by a few weeks, however Zamtel turned down that request. The Zambian government, which owns Zamtel, is looking at selling up to 75 percent stake in the telco. Analysts had pegged the fixed-line operator's enterprise value at $200 million.
The decision to drop its plans of acquiring Zamtel was taken at a BSNL board meeting on Wednesday evening. Last month, the PSU lost the bid to manage telecom networks of Ethiopian Telecommunications to France Telecom. However, the BSNL board gave an in-principle approval to the Pitroda report, which has also recommended a 30 percent stake sale in the PSU.
BSNL Chief Managing Director Kuldeep Goyal said that the company was recasting its strategy for expanding operations globally. "We intend to revisit all such proposals after formulation of this strategy. We are hopeful that we shall revive our efforts with renewed energy after this," he told Economic Times.