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MTNL likely to offload 50% stake in Suntel

Mahanagar Telephone Nigam Ltd (MTNL) which has been shortlisted as the preferred bidder to acquire Sri Lankan telco Suntel, is already in talks with partners to offload a 50% stake in the company (Suntel).

If Suntel were to be a 100% subsidiary, it will be subject to the policies and practices of MTNL. But, Suntel is a profit-making company and MTNL wants it to retain its existing structure with regard to all its policies - MTNL is of the view that this can be achieved if it limits its stake in the Sri Lankan telco to 50%.

“Suntel is a profit-making CDMA technology-based fixed-line telephony service provider in Sri Lanka, with highly-skilled work force having a subscriber base of around 3,00,000. Based on its final bid, MTNL has been selected as the preferred bidder by the sellers.

The report also adds that MTNL was acquiring Suntel “in its quest to expand business in the overseas market due to shrinking domestic opportunities”.

MTNL, which offers telecom, internet and IPTV services in the metros of Delhi and Mumbai, had been witnessing a fall in its revenues and profits over the last couple of quarters due to market saturation in these two cities. Sri Lanka is set to be the company’s third market outside India.

It must also be pointed out that over the last couple of years, MTNL has lost its bid to acquire Telekom Kenya in addition to failing to win mobile licences in Saudi Arabia, Qatar, Bhutan and several other countries.

Despite losing its bid for licences in West Asian countries, MTNL will soon get another chance to have a crack at these markets - Qatar, Lebanon, Oman, Bahrain, Iran and Turkey are set to auction fresh mobile licences in the coming months. (Courtesy Economic times of India)

 

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