NEW DELHI, India—The Indian government has decided to dilute its holdings in its two telecom service providers that offer wireless services, BSNL and MTNL, following the success in privatizing the state-run long-distance company VSNL.
BSNL, which provides fixed-line telephony in all the telecom circles, is in the process of rolling out nationwide GSM service, while MTNL is already providing GSM and CDMA services in New Delhi and Mumbai.
Private partners for the two companies will be selected through a process of competitive bidding, Communications Minister Pramod Mahajan announced in Mumbai. The government is divesting all major public-sector companies as part of its divestment plan.
After acquiring a 25-percent stake in VSNL last week, the Tata Group hopes to become an integrated telecom company offering cellular, fixed mobile, Internet and long-distance services. The acquisition, including an open offer to buy a further 20 percent from VSNL’s public shareholders, could cost the Tata group an estimated US$532 million.
Ratan Tata, formerly Tata group chairman, became VSNL chairman after buying the stake.
