Till recently, VSNL was the third largest stake holder in ICO Global with China Telecom's stake being marginally higher. However, a few weeks ago, VSNL subscribed to the rights issue by investing $46 million which allowed it to maintain its stake in the company. China Telecom, on the other hand, failed to exercise its right thereby letting its holding in ICO Global go down, which made VSNL the second largest stake holder.

With the $46 million fresh funding, VSNL has till now invested around $150 million in ICO Global, which is a consortium of international telecom companies aiming to provide satellite-based global handheld personal mobile communication services. In fact, VSNL already has an agreement with ICO Global to set up, operateand maintain ICO's international gateway in India. As part of that, VSNL is setting up 12 satellite access nodes in the country.

Besides, VSNL has also got the exclusive right to market ICO Global's services in India and non-exclusive rights to market the services in other parts of Asia. In fact, VSNL is planning to form a joint venture company for marketing the services both here and abroad. For that the company has already issued request for proposals inviting offers from private Indian companies and it is understood that the process of shortlisting the proposals is currently on.

ICO Global, which is developing systems similar to that of Motorola-led Iridium and Lorel and Qualcomm promoted Global Star, expects to launch its commercial services by 2000, about two years after competitor Iridium launches its services.

A few days ago, ICO Global successfully concluded its initial public offering in the US of 10 million shares at $12 per share thereby raising $120 million. The company also raised $570million by way of senior unsecured notes.