India’s Economic Times is reporting that US telecoms giant AT&T is considering a re-entry into the Indian telecoms sector through an investment in state-owned telco Bharat Sanchar Nigam Ltd (BSNL). It remains unclear as to whether the Indian government is agreeable to a strategic investor in BSNL, but it is understood that a pre-IPO placement may be considered. A source familiar with the discussions is said to have noted that, should there be a stake sale, it would be for no more than 26%. It is believed that, should a sale be approved, AT&T could find that the cost of a one-quarter stake in the telco could be as much as INR160 billion (USD3.29 billion).
BSNL is currently wholly owned by the state, although it has long been rumoured that a stake sale could be on the cards. According to TeleGeography’s GlobalComms database, in January 2008 the government revealed that a suspended plan for an IPO of up to 10% of BSNL’s shares was being reconsidered. In August 2008 SD Saxena, BSNL’s finance director, confirmed that a stake of between 5% and 10% would be sold, in a deal that it claimed would value the company at about USD100 billion, with the issue expected to take place within six months. However, just two months later it was reported that plans for an IPO had been ‘indefinitely shelved’ amid the global economic downturn.