VSNL officials said the company was yet to take any decision on the proposedequity stakes of these firms and the total number of partners in the newentity. The officials said the final equity structure would be finalised inline with the Union government norms regarding DLD.

According to industry sources, VSNL has been scouting for partners to enterthe segment for quite some time. Preliminary talks were on with state-ownedutility companies like Railways and PowerGrid. VSNL is still evaluating theoptions to raise funds for the Rs 500 crore project.

VSNL officials said the company would pick up a controlling equity stake of51 per cent in the venture. "Although, we are serious about a joint venture,VSNL and MTNL have not yet reached any agreement for the purpose," a VSNLofficial said. Industry sources say that this development comes in the wakeof private telecom players like BPL, Birla and Tatas planning to make foraysinto the DLD segment with their partners. However, no official confirmationwas available from MTNL on this development.

Recently, the department of telecommunications (DoT) finalised the nationallong distance privatisation policy and prescribed a minimum revenue share of15 per cent as annual licence fee. The government is likely to kick off theDLD privatisation plan shortly through open bids. Videsh Sanchar Nigam hadposted an 11 per cent rise in net profit to Rs 298.40 crore during the thirdquarter of the current fiscal against Rs 268.42 crore in the correspondingperiod previous fiscal. Net income during the period decreased by 2.02 percent to Rs 1,662.8 crore from Rs 1,697.1 crore.