Tata-owned Videsh Sanchar Nigam Ltd is planning to bid for a 26 per cent stake in basic telephony provider Pakistan Telecom Company Ltd, a VSNL official said.
The company will finalise a consultant to evaluate its acquisition proposal. The last date for submitting the expression of interest for the PTCL stake sale is January 28.
"We are planning to bid for PTCL. A final decision will be taken after the consultant submits its report," the VSNL official said.
Going by current market rates, 26 per cent of PTCL is worth around $750 million, the official said. Currently, the government of Pakistan owns 88 per cent stake in PTCL, while the public holds the remaining 12 per cent.
Bidding for PTCL is part of VSNL's long-term strategy to become a global telecommunication company.
VSNL has also applied for long-distance and local loop licence in Pakistan, according to the VSNL official. It is also trying to obtain a similar licence in South Africa.
VSNL has already procured licences to operate in six countries including the US, Hong Kong, the UK, Sri Lanka and Nepal.
VSNL's attempts to enter Pakistan's telecom space may be easier said than done because of the hostility that exists between the two countries. "We are trying our best," the VSNL official said.
However, a recent comment by the Pakistan Telecommunication Authority's head is being viewed as positive for VSNL.
PTA Chairman Shahzada Alam Malik recently said, "there is an improvement on the diplomatic front between the two countries. Their (VSNL's) request is still on. We have to wait for further enhancement in our relations. And whenever we receive a nod according to government policy we would award them a licence." Malik's remark was reported in Pakistan's Daily Times newspaper.
The efforts to privatise PTCL began in 1998. Eleven companies including Align Technologies of the US, Queste Communications of Australia, and Orascom Telecom of Egypt had bid for PTCL stake by 2001. However, the privatisation of PTCL was put on hold after the slowdown in the global telecom sector.
Pakistan's privatisation commission expects PTCL stake sale to go through by the third quarter of 2005.
The commission has appointed a financial advisory consortium co-led by Goldman Sachs International and JP Morgan for the privatisation of PTCL.
Besides providing fixed line, value added and other ancillary services, PTCL also owns subsidiaries that provide cellular and Internet services.
Teledensity under the PTCL monopoly is 3 per cent.
