A Multi-Billion dollar question!

Arun Sarin of Vodafone stunned the Indian corporate world by his audacious acquisition of of 67% of Hutch Essar for $11.1 Billion It is interesting to note that has only GSM business and its subscriber base on 31 jan 07 was 24,414,358

In contrast, as on January 31, 2007, BSNL

commanded a customer base of 33.5 million Wireline, 3 million CDMA-WLL and 24.5 million GSM Mobile subscribers. BSNL’s earnings for the Financial Year ending March 31, 2006 stood at INR 401.8b (US$ 9.09 b) with net profit of INR 89.4b (US$ 2.02 billion).

The moot question is, will the Government be better off, at this juncture, by selling a majority stake in BSNL?

It can, by this one stroke, achieve a few objectives.

For starters, it can add the sizable and substantial sale proceeds (when Indian telecom is such a hot story) to the kitty and use that to create a rosy economic picture .

Secondly, this move will signal its commitment to privatise public sectors undertakings (how it will manage the political ramifications is another issue altogether)

Then it can save some face by showing a large chunk of disinvestment revenue to its credit.

It can also make hay while the sun shines.

Who will be interested and more importantly, at what price?

Lets wait and watch.


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