State-run telecom majors BSNL and MTNL are not seriously considering to be a part of the consortium led by Delhi-based Vavasi Group to pick up a 46 per cent stake in Kuwait’s Zain Telecom.
In response to a written question in the Rajya Sabha on whether BSNL and MTNL were seriously considering joining the consortium to bid for a minority stake in the Kuwaiti telecom company, Minister of State for IT and Communications Gurudas Kamat replied in the negative.
“The proposal is in the preliminary stage only and has not reached the stage for initiating the process of due diligence,” Kamat said, when asked if the proposal has been subjected to the process of due diligence.
Vavasi Group, along with its Malaysian partner Al Bukhary, had signed an exclusive agreement with the Kharafi Group to buy out a 46 per cent stake in Zain for $13.7 billion (nearly Rs 64,000 crore).
Further, the minister said BSNL and MTNL together have Rs 41,471 crore cash on hand as of September 2009. As per the provisional and unaudited accounts, cash and bank balance of BSNL is Rs 36,392.42 crore and that of MTNL is Rs 5,078.59 crore.
Kamat said BSNL and MTNL are losing market share in the mobile segment due to intense competition and entry of new players with aggressive rate plans. The market share of BSNL has come down to 13.86 per cent in September this year from 21.5 per cent in March, 2007, while MTNL’s share has come down to 9.82 per cent from 13.39 per cent in the same period, he said.
BSNL and MTNL have garnered about 73,133 and 1.29 lakh subscribers for their recently-launched 3G services respectively. But the growth in their 3G subscriber base has not been able to offset the fall in their overall share in the mobile market.