MTNL seeks VSNL for entering long distance telephony jointly

Although the two corporations are believed to have discussed the possibilities informally, Sundresan said he was not aware whether VSNL board had discussed the issue. MTNL and VSNL along with Telecom Consultants India Ltd (TCIL) have earlier bid for overseas operations, Sundresan said, adding initially MTNL would start long distance operations in two areas of Delhi and Mumbai and operations would be expanded to other circles later.

Delhi and Mumbai would be natural choice to begin the long distance operations due to its presence in the basic telephony but the operations would be expanded to other circles also, he added.

MTNL had initially planned to invest about Rs 1,000 crore over next three years for long distance operations, Sundresan said, adding the plans regarding investment and joint venture partner would be finalised within next two months.

Sundresan said MTNL was one of the companies fulfilling the conditions for starting long distance telephony as announced by the Department of Telecommunications (DoT) last month.

DoT had fixed the paid-up capital of Rs 250 crore with a total networth of promoters of the company at Rs 2,500 crore and experience in the telecom sector as the criteria for award of the licence.

As far as investment is concerned, Sundresan said MTNL was a debt-free company and could go to financial market anytime to raise the money. MTNL has a networth of over Rs 7,000 crore on a share capital of Rs 630 crore, he said adding the corporation was in a position to raise up to Rs 20,000 crore from the market.

Sundresan also said MTNL would expand its operations in basic telephony in other circles than Delhi and Mumbai and for that also MTNL would look for an ally, but no decision was yet taken.

Telecom Regulatory Authority of India (TRAI) had recently submitted the guidelines on entry of more operators in basic telephony in 15 new circles. MTNL would decide only after the finalisation of guidelines by the DoT, he said.