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TM Arun Kumar
Mumbai, Sept 2: The state-owned Videsh Sanchar Nigam Ltd (VSNL) is close to picking up an estimated 10 per cent stake in the Essel group-promoted $1-billion Agrani project. According to sources, VSNL is bracing itself for approvals from its board and the government to invest in the equity of the satellite-based global mobile personal communications system (GMPCS) venture.
Besides investing in the equity of the venture, VSNL is also setting up the international gateway for the system, for which the company proposes to invest an estimated Rs 45 crore.
The Agrani project is a scaled-down version of other competing GMPCS projects such as the Motorola-led Iridium, Inmarsat-promoted ICO Global Communications and Globalstar and is expected to become operational by the year 2001. The Agrani project is based only on one satellite, as compared to 66 satellites to be used by Iridium, and will have a footprint covering the Indian sub-continent and the Middle East.
It is understood that the project has undergoneconsiderable change since it was conceived a few years ago. At that time, it was proposed that the system will be based on two satellites and will cover even parts of Africa besides the Indian sub-continent and Middle East.
However, since then the project has been scaled down to use only one satellite and the foot print also reduced. Also, sources said that Hughes Electronics, which was initially supposed to launch the satellites for the system, has now been replaced by US-based military aircraft and satellite maker, Lockheed Martin.
It is understood that the Agrani system is also designed to provide video facilities and direct to home (DTH) services to the Pan Asian and Middle East countries, besides normal voice telephony.
This is the second GMPCS project in which VSNL will have an equity stake. The company, which is India's international telecom monopoly, recently became the second largest shareholder in ICO Global Communications with a 7.56 per cent stake and has so far invested an estimated $150million in the project. VSNL is also in the process of forming a joint venture with a few domestic cellular operators to market ICO Global's services in India for which it has an exclusive right.
Besides, VSNL is also setting up a satellite access node (SAN) for ICO Global at an investment of Rs 19.5 crore, which will be owned, operated and maintained by the company.
In addition, VSNL has similar arrangements with the other GMPCS projects like Iridium and Globalstar for operating and maintaining their international gateways in the country. The company has so far invested Rs 50 crore for setting up the Iridium gateway, which will be part-owned by it.
INSIGHT
A perfect move
The move to pick up stake in the Agrani project is consistent with VSNL's endeavour to become a global player. Moreover, it had incorporated a subsidiary VSNL Seamless Services on March 31, 1998, to market its value-added services like Internet services, E-mail, electronic data interchange and video-conferencing.It makes sense for VSNL to pick up stake in the project for the following reasons. First, it would entail higher margins in the future. Second, VSNL's monopoly as the international gateway is set to remain only till the year 2004. By picking up the stake, VSNL should be able to safeguard its business interests in the future. Third, as per the guidelines, the installation and operation of traffic on these networks will remain with it. The ministry has made it mandatory for all calls, originating or terminating in India to pass through the VSNL gateway.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.
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