VSNL's S African telecom firm stake buy in limbo

The South African government's decision to make Infraco a state-owned company has dashed Videsh Sanchar Nigam's (VSNL) hopes to acquire a 26 per cent stake in the company. The South African government had earlier planned to make Infraco a separate company to lower telephony charges.

In a media briefing in Johannesburg yesterday, the communications department of the South African government announced its intentions to make Infraco a public company. The department also made it clear that the company, at present held under another company Eskom, would be transferred to the public enterprises department.

VSNL was believed to be in race to acquire a 26 per cent stake in Infraco, with the balance to be held by the South African government.

The joint venture company was to become the third network operator in South Africa, offering long distance services there. It was also to build and operate a submarine cable line carrying international long distance (ILD) traffic.

A VSNL executive said, "VSNL continues to remain invested in the South African market and will continue to look at opportunities there."

According to earlier news reports, the investment was to be routed through VSNL's subsidiary Tyco, which is one of the largest players in the ILD space.

VSNL already has a 26 per cent stake in South African Second Network Operator (SNO) Telecom and had started rolling out services in the country.