Bharat Sanchar Nigam awaiting state nod for divestment (Lead)June 23rd, 2009 - 5:37 pm ICT by IANS
New Delhi, June 23 (IANS) State-run telecom operator Bharat Sanchar Nigam Ltd (BSNL) Tuesday said it was awaiting approval from the government for its maiden initial public offering (IPO).
BSNL chairman and managing director Kuldeep Goyal told reporters here that the company would initiate its valuation process and start talks with labour unions after getting the government’s go-ahead.
“If the government decides we have to go for IPO, then we will talk to the union and evaluate the company,” Goyal said.
The company will also appoint merchant bankers as advisers on the IPO launch soon after getting the government nod, he added.
BSNL, which has proposed to dilute 10 percent of the government’s equity holding through IPO to raise about $10 billion, has a paid up capital of around Rs.5,000 crore and clocked revenues around Rs.45,000 crore in 2008-09.
The company also has more than Rs.30,000 crore in cash balance and is going gung-ho on its expansion plan, mainly through acquisitions.
“We are looking at some telecom operators in African countries,” said Goyal.
Asked about the communication minister’s proposal to lower tariffs further, he said: “Tariffs are already at lowest levels… If the levies are reduced then we can bring down tariffs further.”
IT and Communication Minister A. Raja had earlier proposed to reduce local call charges to 10 paise per minute and long distance calls charges to 25 paise per minute.
BSNL had last year invited bids for equipment to build 93 million GSM lines valued at over $6.5 billion.
Talking about the bid results, Goyal said: “The financial bids have been opened. Ericsson technically qualifies (for supplying GSM equipment) in north and east and Huawei for south.”
He, however, did not mention who won the contract in western India.
BSNL will negotiate pricing with Ericsson and Huawei.
“Reasonability of the pricing has to be discussed with both companies,” Goyal said.
Asked about his view on the third generation (3G) spectrum base price, which is assumed to have been fixed at Rs.4,040 crore, Goyal said: “If it is less, we will be able to provide services at a cheaper rate.”
BSNL has also announced that it will launch 3G services in Gangtok in Sikkim by Aug 15.
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