New Indian IT Plan Drops Telecom Privatization Proposal

A plan issued by India's new government would cancel the proposed sell-off of government equity in two Indian telecoms carriers.

June 3, 2004

2 Min Read
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BANGALORE, India — A plan for IT and communications issued by India's new government would cancel the proposed sell-off of government equity in two Indian telecommunications carriers.

The two carriers, Mahanagar Telephone Nigam Ltd.(MTNL) and Bharat Sanchar Nigam Ltd. (BSNL), wouldnot be privatized under the plan. "They are off the disinvestment list," said Dayanidhi Maran, the new IT andcommunications minister.

The previous government had proposed a list of government-owned companies to be be privatized. Among the were MTNL and BSNL, which together employ thousands of Indian workers. The carriers are busy handling the emerging competition from private wireless and landline phone services.

The government-owned Indian Telephone Industries Ltd. (ITI), the country's oldest public sector company, will be revived, Maran said.

ITI, a manufacturer of telecom equipment in partnership with overseas firms such as Alcatel, had almost been written off as a viable company.The previous government did privatize two government-owned carriers, Videsh Sanchar Nigam Ltd., a long-distancecommunication services carrier, and CMC Ltd., a softwarecompany. Both were acquired by the Tata Group.

The latest anti-privatization move was expected since India's new coalition government needs the support of Communist parties to remain in power. The Communist parties here are ardent advocates of state ownership.

Other proposals in the IT plan were largely designed to assure universal Internet connectivity and reducetelecom connection costs for consumers. Maran saidthe government will revamp the existing telecom policy to take advantage of the latest technology andto reduce costs. "Providing broadband connectivity to allat the most reasonable prices will be my top-mostpriority," Maran said.

The minister said India will seek to leapfrog current wireless technologies and move to 4G technology. He said the country has the market volume and technology skills needed to be a significant player in 4G technology. He said India will establish a National Center for Excellence in 4G.

Among the government's other proposals were: migrating to IPv6 by 2006; promoting research and development in IT andcommunications; making India the outsourcing hub forsoftware development; doubling telephonepenetration within three years; and connecting all Indian Internet service providers to a national Internetexchange to achieve efficient traffic routing.0

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