Bids invited to set up JV firms
The government has now initiated process to bail out loss-making state-run telecom equipment manufacturer Indian Telephone Industries (ITI). As part of the revival plan, ITI has invited bids from Indian and global telecom majors to set up joint venture (JV) companies in association with ITI.
Even though the details are not awaited, sources close to the development said the ITI will hold minority stake in the proposed JVs (about 26) per cent while the rest will be owned by the JV partner. ITI will provide necessary infrastructure and real estate other than the manpower for the proposed JVs.
According to a press statement issued by ITI, the JVs have been proposed at Rae Bareli, Naini and Bangalore. While bids have been invited from interested players for JV on WiMAX technology at Rae Bareli, the proposed JV at Naini will focus on Gigabit Passive Optical Network (G-PON), Gigabit Ether Passive Optical Network (GE-PON) and optical transmission equipment. The company is interested to set up JV on IT core system in Bangalore, where the company employs about 2,200 people.
Bangalore-headquartered ITI has six manufacturing units, including three in Uttar Pradesh (Mankapur, Rae Bareli and Naini), one each at Srinagar in Jammu & Kashmir, Palakkad in Kerala and the main facility in Bangalore. Three of the six units are said to be profitable. The government holds around 93 per cent of its equity in the 61-year-old telecom behemoth, with the remaining seven percent is largely held by the public.
In June this year, the government has announced to write-off Rs 2,820 crore losses accumulated by ITI to enable the state-run undertaking hive-off its viable units for private partners. Prior to this, the government had also offered a bailout package to the tune of Rs 1,025 crore was given in fiscal 2005-06.
The company has an order book of Rs 6,800 crore, including fresh orders to the tune of Rs 3,200 crore secured this fiscal (2009-10).
