BSNL looks to hold direct talks with Zain for controlling stake.

State-owned telco BSNL on Friday said it plans to enter into direct talks with Zain to acquire a controlling stake in the Kuwaiti firm if theVavasi-led consortium fails to clinch a deal with the West Asian operator. At present, Delhi-based firm Vavasi is in exclusive talks with Zain to acquire about 46% stake in it for $13.7 billion (Rs 65,000 crore). Vavasi, which has already roped in Malaysian billionaire Syed Mokhtar Al-Bukhary, is also in talks with the two Indian PSUs - BSNL and MTNL to join the consortium. “If that (exclusivity period with Vavasi) ends, and suppose the deal does not go through, and there is a possibility of having us a direct negotiation, we would like to do it,” BSNL’s chairman and managing director Kuldeep Goyal told reporters in Delhi. He also added that BSNL and MTNL would jointly approach Zain after the exclusivity period with Vavasi ends. Asked if BSNL would join the Vavasi-led consortium Mr Goyal said: “We have sought certain information from the Vavasi. As and when the information is received, we will proceed accordingly.” Another top source in BSNL indicated that the PSU would not join the consortium while adding that the service provider had already opened backdoor negotiations with Zain. As reported earlier by ET, BSNL and MTNL are having second thoughts about joining the Indo-Malaysian consortium that has entered into a preliminary agreement to buy a 46% stake in Kuwait’s Zain after an informal inquiry by one of the two state-run telcos into consortium leader Vavasi failed to satisfy it about the group’s credentials. The investigation showed that Delhi-based Vavasi, which says it has interests in telecom and renewable energy, had not paid its employees for many months, had no revenue streams and had a share capital of just Rs 5 lakh, an executive at one of the two firms with direct knowledge of the situation had earlier told ET. Mr Goyal also said that BSNL was in talks with Ericsson for lower prices for its 93 million GSM lines tender worth Rs 40,000. BSNL’s original tender was divided into four parts-25 million lines each for north, west and south zones and 18 million lines for the east. It had selected Ericsson for the North and east zones and Huawei for west and south zones. But, BSNL has been unable to give the contract for the West Zone to Huawei following objections from security agencies.
SUDEEP SINGH
PGDM III SEM
SEC-B