BSNL puts Zain acquisition plan on hold

BSNL puts Zain acquisition plan on hold

New Delhi: State-run telecom firm Bharat Sanchar Nigam Ltd (BSNL) has put on hold its plan to acquire a stake in Kuwaiti mobile telephone operator Zain, BSNL chairman Kuldeep Goyal said on Wednesday.

Shares in Zain, the largest listed company on the Kuwait benchmark by market capitalization, were down 4.1% at 01:23 pm, as the news added to the uncertainty surrounding Zain’s stake sale.

“The plan is on hold," Goyal told reporters on the sidelines of a news conference.

BSNL and state-run Mahanagar Telephone Nigam Ltd (MTNL) have been considering partnering India’s little-known Vavasi Group and Malaysian billionaire Syed Mokhtar al-Bukhary to acquire a 46% stake in Zain.

Goyal said BSNL took the decision because Vavasi did not respond to certain specific information sought by the Indian firm.

He also said he expects to sign a deal on GSM lines with Swedish network gear maker Ericsson for northern and eastern regions shortly.

BSNL, India’s No. 4 mobile operator, last year sought bids for 25 million GSM lines each for its domestic operation in the north, south and west and 18 million lines in the east.

Goyal said the firm has earmarked Rs14,000 crore in fiscal 2009-10 for its capex programme, for which it will utilize its cash reserves.