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Tatas held no talks with BPL for VSNL bid

India's second largest business conglomerate, the Tata group, has held no 'material discussions' with telecoms firm BPL Communications to team up in the bidding for state-run telecoms giant VSNL, a senior official said.

Analysts had expected BPL Communications, which last week pulled out of its original bidding consortium, to join the Tata bid for Videsh Sanchar Nigam Ltd that is being privatised by India.

Last week, a senior official with the Bangalore-based BPL told Reuters his firm was exploring a tie-up with the Tata group, a major partner in a firm with which BPL earlier this year decided to merge its cellular operations.

The privatisation of the New York Stock Exchange-listed VSNL is the biggest ever sell-off being attempted by the Indian government in a decade of economic reforms.

A senior Tata group executive, who asked not to be named, said on Tuesday that "there have been no material discussions between the two sides".

He said the Tata group and BPL had held some discussions long ago, but that was before both sides put in their separate bids for VSNL, the country's monopoly overseas telecoms provider and the biggest Internet access provider.

"It's obvious nothing came of these discussions considering both bid separately," he added.

The government plans to bring down its stake in the company to 26 per cent from 52.97 per cent by selling a 25 per cent controlling stake to a strategic partner and another 1.97 per cent to VSNL's employees.

The sale of the company is expected to be wrapped up before the end of the year with the government expected to call for price bids from prospective suitors in December.

Three bidders are in the race for the firm, one of few profit-making blue-chip companies controlled by the government.

These include India's largest business group, the Reliance group, the Tata group and a consortium comprising Indian firm Sterling Ltd and US firms TyCom and Century Tel.

BPL Communications was a part of the Sterling Consortium, but dropped out of it last week.

But the firm with large interests in the Indian mobile phone business said it was still keenly interested in VSNL and "would evaluate other options and alternatives for participating" in the bidding process.

In June, BPL announced it was merging its cellular business with that of another mobile company, Birla-AT&T-Tata, in a $2 billion deal to create India's biggest mobile phone company.

Birla-AT&T-Tata is an equal venture between US telecoms giant AT&T and India's Tata and Birla groups.

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