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October 6, 1997


BT to submit fresh proposal for JV with VSNL

British Telecom will submit a fresh proposal for a strategic alliance with the Videsh Sanchar Nigam for setting up a regional hub in response to the new selection process adopted by the government.

The company has also asked for a joint selection committee with VSNL and Telecom Commission to consider the responses from different companies.

The new proposal will include the South-Asian hub as a key part of developing the strategic alliance, BT says. BT-MCI will jointly submit its new
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proposal in response to the DoT's latest selection process.

A set of questionnaire has been sent to over a dozen multinational companies.

Disclosing this, British Telecom project implementation director (strategy and joint ventures) John Prior said "The response will be delivered on October 17 and will contain both specific and broad-based proposals for how such an alliance could develop, based on the experience gained from setting up over 50 major partnerships worldwide." He revealed the South Asian hub has been included as a key part of a developing strategic alliance. He said the project alone would generate for VSNL an extra Rs 30 billion in foreign earnings over 10 years.

A VSNL-BT-MCI proposal for a tieup is pending with the government, awaiting approval for the last 18 months. A detailed feasibility study was also carried out on this. The new approach of involving other companies for selecting a partner for VSNL has been adopted as a sequel to this. The fresh response that BT is planning to present is stated to be a diluted version of the original proposal.

Prior said the fact finding visits BT made to SAARC and other countries over the past year confirmed the viability of the original project. "They agree that the infrastructure investment will untie the countries using fibre optics to the benefit of inter-country trading and the setting up of telephone based service industries in the region as a whole," he said.

Prior said that letters of support have been received from telecommunication operators in Bangladesh, Sri Lanka, Maldives and Pakistan. The broader benefits of an alliance include access to the world's leading Concert global product set. This product set is continually expanding based on the latest research and development conducted by BT-MCI.

Prior said, "We believe a joint selection committee will be set up by VSNL and Telecom Commission to consider the responses. We are willing to cooperate in any way that may be required."

Explaining the BT position he said all that the company wanted was an early decision so that the benefits to India and VSNL of strategic alliance with a global telecommunications company can start to be realised. Asked if the BT was peeved that the new procedure has been adopted after the government sat on the earlier proposal for so many months, the BT official said, "We welcome the recent process outlined by VSNL for the selection of a suitable strategic partner. This follows the clarification by the government of India on the method of selection of a strategic partner."

- Compiled from the Indian media

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