New telecoms minister rules out privatisation of state-run behemoths

1 Jun 2004

India’s new Minister of Communications, Dayanidhi Maran, has ruled out the privatisation of state-owned telcos Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL). Maran has promised to reassess the issue of increasing foreign direct investment in the telecoms sector, from 49% to 74%, but also said that ‘MTNL and BSNL are off the divestment list’. The new minister also proposed that India’s wireless sector leapfrog 3G technology and move straight onto developing 4G services, saying that 3G has failed to prove cost effective.

At the end of April 2004 India had 43 million fixed line subscribers and 35 million wireless users, according to latest figures released by the Telecom Regulatory Authority of India (TRAI). Of the mobile subscribers, 27.15 million were on GSM networks, whilst 7.41 million utilised CDMA technology.