MUMBAI, January 28: Videsh Sanchar Nigam Ltd (VSNL) has asked Price Waterhouse to work out the modalities for setting up its value-added services subsidiary within the next 3-6 months.Price Waterhouse, which was appointed VSNL's consultant early this week, has been asked to come out with its recommendations at the earliest, so as to avoid any problems later with private internet service providers (ISPs) over the lack of a level playing field. The E-mail service providers had earlier accused the Department of Telecommunications (DoT) of depriving them of a level playing field when VSNL started offering its Internet services, as E-mail is a part of VSNL's Internet services.
These problems are also akin to that being faced by the Mahanagar Telephone Nigam Limited (MTNL) for its foray into cellular services with private cellular operators in Delhi and Mumbai terming it as a breach of tender conditions.
"We do not want any such problems and are therefore keen to have our outfit up and running before theprivate ISPs even enter the market," said a top VSNL source.
VSNL had earlier shortlisted Price Waterhouse and Andersen Consulting, but opted for the former. The telecom giant, following a preliminary study undertaken by SBI Caps on behalf of VSNL, has identified internet services, video conferencing, electronic commerce and electronic mail as the four key areas for its proposed subsidiary.
"The study has identified these four areas of operation that the new subsidiary should undertake. Now we have asked Price Waterhouse to advise us on how to hive off these divisions into one company and make it competitive internationally," said a top VSNL source.
The consultant will look at the various aspects of the subsidiary, including tax and legal issues. It will also advise VSNL on how the company can best compete with the international players who might offer the same services rendered by the subsidiary, DoT had about a year ago asked VSNL to hive off its value-added services into a separate subsidiary. Thedepartment's mandarins felt that VSNL's value-added services gave it an advantage over others, especially since it also controlled the international gateway.The various value-added services made up about seven per cent of VSNL's revenues of Rs 5,262 crore in 1996-97.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
