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Wednesday, July 1, 2009

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BSNL mulls inducting foreign telco as strategic partner
28 Jun 2009, 1233 hrs IST, PTI

NEW DELHI: Amid falling revenues and profits, state-owned BSNL is mulling a proposal to induct a strong foreign telecom operator as a strategic
partner to reverse its fortunes, a move that may yield more money to the government than from listing or disinvestment.

"A strategic partner will be a better option...provided the government is favourable to that idea," a source, working closely on the listing of the PSU and involved in negotiations with the employees' unions, said.

BSNL's valuation has been pegged at about 100 billion dollars and the PSU has a paid up capital of about Rs 5,000 crore (1.04 billion dollars).

BSNL had reported a revenue of Rs 38,000 crore and a net profit of Rs 3,000 crore in the last fiscal and this year the company has projected a dip in both total income as well as net profit, mainly due to lower average revenue per user (ARPU) and if the trend continues for few years the company's long term plans may suffer.

Asked why a foreign strategic partner should be favoured over listing and disinvestment, sources said "...because when they come they can have a say in the management and change the face and culture of the company."

There are many big foreign telecom operators, like AT&T, France Telecom and others, who are looking at entering the Indian market and these companies are in talks with some of the private service providers.

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