MTNL planning 50% stake offload in SunTel

In a case of wagging the dog by it's tail, MTNL, one of the shortlisted preferred bidder for Srilankan TelCo SUNTEL, is in talks for offloading 50% stake. As a 100% MTNL subsidiary SUNTEL would be subject to MTNL policies & practices and "SunTel is a profit making professionally run company, and MTNL doesnt want to change its working".

The PSU, which is a JV partner in Nepal’s United Telecom and also offers telecom services in Mauritius through its 100% subsidiary, has been scouting global markets for new licences to make up for shrinking local opportunities.

MTNL has lost its bid to acquire Telekom Kenya & failed to win mobile licences in Saudi Arabia, Qatar, Bhutan and several other countries. However second chance is around the corner— Qatar, Lebanon, Oman, Bahrain, Iran and Turkey are set to auction fresh mobile licences in the coming months.

As reported in Economic Times

Tata Group in talks to acquire Sri Lanka's Suntel

The Tata Group is in talks to buy out Suntel, Sri Lanka’s premier private telecom operator, through group company VSNL’s international arm, VSNL Global. VSNL Global recently bagged international long distance (ILD) and internet service provider (ISP) licenses in Sri Lanka, and is hoping to expand inorganically to become an integrated telecom player in the island nation.

If the deal is successful, Suntel will be VSNL’s third telecom service provider outside India. VSNL already has 51% stake in Neotel, South Africa’s second national operator, and is also in the process of picking up 26% in InfraCo, a new telecom network operator in South Africa.

Suntel is the largest fixed-line competitor to incumbent Sri Lanka Telecom (SLT) and has a subscriber base of about 250,000. It offers a range of voice, data, ISDN, dedicated packet solutions and internet services. Suntel is a joint venture between Swedish telecom giant Overseas Telecom, Metrocorp, Townsend of Hong Kong, National Development Bank, and International Finance Corporation (IFC), private equity arm of the World Bank Group. Suntel’s net profit for the six months to June 30 dipped by LKR 93 mn year-on-year to LKR 290 mn, while revenues virtually doubled to LKR 3.31 bn from LKR 1.96 bn a year earlier.

Read The Economic Times article.