State-run MTNL's first-ever overseas acquisition is stuck in search of a right joint venture partner to pick up 50 per cent in Sri Lankan operator Suntel, which it is proposing to buy.
"We are looking for a partner to pick up 50 per cent in Suntel...All other issues have been settled," a senior MTNL official said.
The official also said MTNL's interest in acquiring Suntel is for the purpose of expanding its business in the overseas market due to shrinking domestic opportunities and in this effort it would focus more on outright acquisitions rather than bidding for licenses in other countries.
The official said MTNL does not want 51 per cent or majority control in Suntel as it wants the Lankan company to be seen as an independent firm, not a subsidiary of MTNL.
The NYSE-listed MTNL is the front runner to acquire Suntel which has 3,00,000 customers with a CDMA technology-based fixed-line telephony service.
Although no official figure of the bid was available, sources say the bid could be in the range of $100-120 million.
The Sri Lankan Rs 3.31 crore Suntel is a profit-making company.
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Sri Lanka, with a fixed-line tele-density of around 10 per cent remains a lucrative market for Indian operators who are expected to face saturation in the domestic market in four to five years.
Suntel is the main competitor to Sri Lanka Telecom. Suntel's largest shareholder is Nordic telecom firm Telia AB, which holds a 55 per cent stake through its holding company Overseas Telecom AB.