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August 25, 1997


Conspiracy theory

Videsh Sanchar Nigam Limited Chairman and Managing Director B K Syngal has accused US telecom giants AT&T and Sprint, and their Indian partners, the Birla and RPG groups, for delaying the VSNL's proposed joint venture with BT-MCI.

The 23-month-old proposed venture between VSNL and BT-MCI, which envisages setting up a $500-million subcontinental hub, is before the full Telecom Commission for its approval.

In a letter to Telecom Commission Chairman A V Gokak, Syngal writes: "The VSNL project has been derailed not because of want of merit, but, I believe, due to extraneous considerations.

"The joint venture has been derailed by vested interests - AT&T Corporation along with Birla; Sprint Inc along with RPG, and Danish Telecom with possibly L&T. These companies have been lobbying against the project for a long time."

Reacting to a move to permit the Power Grid Corporation Limited to set up a long-distance telephone venture, the VSNL CMD writes that the VSNL-BT joint venture is similar to that of Power Grid's.

Power Grid has decided to go for limited international competitive bidding among three multinationals - AT&T, Sprint and Danish Telecom.

Industry observers feel that the VSNL-BT-MCI venture was opposed by some multinationals as they felt that the venture would have an advantage over others once the long-distance telecom service sector opens up.

For the last two years, the Telecom Commission has not been able to decide whether the project violates the national telecom policy or not. VSNL has denied charges that its venture violates the policy.

Syngal, who feels that the two projects are similar, has requested that "this project as well as our JV be treated at an equal level, with the same yardstick, with the same parameters so that your own PSU can be protected".

"We made commitments to investors. They will also have concerns that on one side a project has been derailed by somebody for two years, on the other, pressure groups manage to get it cleared at the drop of a hat," Syngal's letter says.

It was basically VSNL's idea to utilise the Power Grid Corporation's infrastructure for the joint venture network. The company has been in contact with Power Grid as one of the partners for transborder connectivity between Delhi-Bombay and Delhi-Calcutta.

"We have records of our prolonged discussions with Power Grid but the corporation may have had a change of heart, perhaps on account of the delays," Syngal said.

The exercise for a joint venture with BT started in July 1995. A detailed proposal for it was submitted to the board in May 1996. The DoT members of the board felt that the policy needed to be cleared by the Telecom Commission first.

VSNL made several presentations to DoT officials in July 1996. Presentations were also made in January 1997 to a high level interministerial group and most recently in April 1997 to the full commission.

- Compiled from the Indian media

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