Date:13/02/2004 URL: http://www.thehindubusinessline.com/2004/02/13/stories/2004021302520100.htm

Back DoT bid to prevent sell-off in Telecom Consultants

G. Rambabu

New Delhi , Feb. 12

IN a move to stall the disinvestment of Telecom Consultants India Ltd. (TCIL), the Department of Telecommunications (DoT) has asked the Ministry of External Affairs (MEA) to intimate the strategic importance of the company and business obtained by it due to the fact that it is a public sector unit (PSU).

According to official sources, once the MEA argues for the need of keeping TCIL under Government control, the proposal to divest 51 per cent stake to a strategic partner will be shelved. However, the MEA is yet to respond to DoT's request.

The department has taken the view that since the company is a premier telecom consultancy and engineering company with several joint ventures abroad, it should not be included in the "sale" list as suggested by the Disinvestment Commission. Instead, efforts will have to be made to mop up additional resources to fund its expansion programme. "While TCIL has requested for 25 per cent IPO in domestic market as this would fetch good returns, the DoT has recommended to offload shares in suitable tranches, initially starting with 10 per cent through GDR/ADR and another 10 per cent through IPO in the domestic market. The funds will be used to invest in new joint ventures abroad, which would be a good business decision," the sources noted.

The company has executed billing systems, e-governance projects, set up and operated GSM systems, optical fibre on power transmission lines, VSAT networks, radio trunking and other hi-tech telecom projects both within the country and abroad.

Its turnover during 2002-03 was Rs 590 crore, which is expected to grow to Rs 1,250 crore by 2005.

They, however, pointed out that there is problem regarding any further joint venture investments by TCIL. Being a "mini-ratna," the company can invest only 15 per cent of its net worth (of Rs 387 crore) for such purposes and has already exceeded this limit.

It has requested the Department of Public Enterprises (DPE), to enhance the investment limit from 15 per cent to 100 per cent of its net worth.

The DPE on its part has written back saying that an exception cannot be provided to TCIL, but if the Union Cabinet takes a decision to this effect the limits can be hiked.

The process for getting Cabinet approval has commenced, they noted.

At present, the company has substantial stake in Tamil Nadu Telecommunications Ltd (TTL), Intelligent Communications Systems India Ltd (ICSIL), TCIL Bell South (TBL) and Hexacom Ltd. It is also a joint venture partner in the overseas ventures, TCIL Saudi Co Ltd (TSCL), United Telecom Ltd Nepal (UTL) and TCIL Nigeria Co Ltd (TNCL).