MTNL-BSNL JV for undersea cable


Maran Wants To Break Stranglehold Of Private Players

By Baiju Kalesh/TNN
Mumbai: In an effort to break the stranglehold of private sector telecom players on undersea cable infrastructure, Union Communication minister Dayanidhi Maran has issued a directive to the state-owned telecom companies to quickly build their own infrastructure to carry their international call traffic. The two companies, MTNL and BSNL, will now sign a 50:50 joint venture agreement to form a new company, which will lay undersea cables all the way to Hong Kong and Singapore in the east and Middle East in the west to carry their international calls.
Maran hopes that this move will break the alleged cartelisation of the private telecom companies like Reliance, Tata (through VSNL) and Bharti and allow the government-owned telcos more room to manoeuvre.
Over the last four years, a series of developments had ensured that private players had come to own all the subsea cable network to international destinations. The government has earlier divested a majority stake in VSNL to the Tatas.
Also, in the last two years, Reliance Infocom acquired Flag and Tata’s acquired Tyco, two US-based companies which controlled a big chunk of the international subsea cable network around the globe. With no owned international link, the state companies were forced to depend on private players.
In May this year, the situation had prompted Maran to say: “I am against the cartelisation. They (these private operators) want to form a cartel and prevent competition in the STD and ISD sectors.’’
Ironically, experts feel that the government-owned telecom players had been given a taste of their medicine. As long as Videsh Sanchar Nigam remained a state-owned monopoly, private sector telecom companies had to pay through their nose for routing international long distance calls.
Ever since it was divested in 1991, the state-owned telecom companies Mahanagar Telecom Nigam (MTNL) and Bharat Sanchar Nigam (BSNL) have been forced to accept the new rules of the game.
The new JV is now expected to provide some relief. According to the plan, the two companies will invest Rs 2,500 crore in the project and will lay the cables within 18 months.View attachment 323