VSNL investment in Tata Tele wrong, says Mahajan

NEW DELHI: Indian Telecommunications Minister Pramod Mahajan said that a

decision by the recently privatised telecoms firm Videsh Sanchar Nigam Ltd. (VSNL)

to invest in Tata Teleservices was wrong and must be reviewed.

"In my opinion, VSNL's investment of Rs 12 billion in Tata Teleservices

is wrong. The government representative (on its board) had opposed it and we

hope that VSNL will reconsider it," Mahajan told reporters.

The Tatas own 45 per cent in VSNL after the recent privatisation while the

government remains a key stakeholder with a 26 per cent stake. Tata Teleservices

is a recently set up fixed-line service provider.

Mahajan said Tata Teleservices was too young a player and diversion of VSNL

funds to it would benefit the new firm rather than VSNL.