Privatization Of VSNL<br />Submitted to:-<br />Submitted By:-<br />AwanishAwasthi<br />KirtiKhattar<br />Pallavi Gupta<br ...
Introduction<br />In 1947, the Overseas Communication Service (OCS) was established in the Department of Telecommunication...
Case Facts<br />VSNL- Privatization<br />Minority share’s sale in 1991-92<br />Strategic sale considered better than minor...
The Bidding for acquisition<br />The companies which are interested in participating    in bid were required to have a net...
Tata Tele Services- Controversy<br />VSNL board decided to invest Rs. 1200 crores in TTL<br /> Over 3-4 years for 20-26% s...
SWOT Analysis<br />
Strengths<br />Financial condition:-VSNL was a cash rich organisation and it was seen to have a potential to make it’s pla...
Weakness<br />Restriction on services: By  the restriction  imposed by WTO on its  monopoly , internet and on ILD  service...
Opportunities<br />Improvement:-It was expected that the services quality, price and efficiency might improve for the cons...
Threats<br />Competitors:- There were several competitors for the VSNL as BSNL and MTNL.<br />Valuation :- The process of ...
Ques. 1- Why did new board decide to invest Rs. 1200 crore in TTL?<br />VSNL needs to have a controlling stake in a basic ...
Ques 2.- Privatization of VSNL helped Indians.  Justify.<br />The privatisation of VSNL is seen as leading to public expen...
Privatization of VSNL  provided higher returnon government’s asset formation.<br />  Better quality communications for the...
Thank You<br />
Upcoming SlideShare
Loading in...5
×

Group 4.... atlass...!!! the last

1,012

Published on

ppt on it

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
1,012
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
47
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Group 4.... atlass...!!! the last

  1. 1. Privatization Of VSNL<br />Submitted to:-<br />Submitted By:-<br />AwanishAwasthi<br />KirtiKhattar<br />Pallavi Gupta<br />Puneet Mehta<br />TanishaAgarwal<br />UtkarshChauhan<br />Prof. Suneel Gupta<br />
  2. 2. Introduction<br />In 1947, the Overseas Communication Service (OCS) was established in the Department of Telecommunications (DoT).<br />Videsh Sanchar Nigam Ltd (VSNL) was created from the OCS as a government owned corporate in 1986.<br />enable greater freedom to managers to plan, operate, develop and accelerate the international telecommunication services.<br />Compared with 2.69 billion telephone minutes in 2000-1, in 1986-1987 the figure was 0.13 billion minutes<br />The ratio of inbound to outbound calls had been 4:1 in 2001.<br />One important reason for this is the discriminatory pricing by<br /> VSNL<br />
  3. 3. Case Facts<br />VSNL- Privatization<br />Minority share’s sale in 1991-92<br />Strategic sale considered better than minority sale<br />Tata’s holding - 45%<br /> Government’s holding - 26%<br />WTO stipulations led to loss of monopoly<br />
  4. 4. The Bidding for acquisition<br />The companies which are interested in participating in bid were required to have a net worth of Rs. 2500 crores . <br /> Tata bid Rs 1439 crores, Reliance bid Rs 1347 crores<br />
  5. 5. Tata Tele Services- Controversy<br />VSNL board decided to invest Rs. 1200 crores in TTL<br /> Over 3-4 years for 20-26% stake<br /> Tata’s Justifications<br /> - Extend VSNL’s reach to basic services<br /> - Part of Tata group’s overall telecom strategy<br /> Communication Minister’s objection<br /> -Unethical to use VSNL’s cash reserves<br /> - BSNL, MTNL might provide better investment<br /> opportunities<br /> - TTL might have been overvalued<br />Issue resolved - VSNL board sets up a committee to review the quantum and valuation of the proposed investment.<br />
  6. 6. SWOT Analysis<br />
  7. 7. Strengths<br />Financial condition:-VSNL was a cash rich organisation and it was seen to have a potential to make it’s place in the global market.<br />Popularity:- By doing a strategic sale of the shares by VSNL to Tata group it’s name also became highlighted in the market as the Tata group already existed.<br />Monopoly:- The monopoly was seen in international long distance (ILD) voice until 2002 and internet until 1990 which had ensured it as a profitable enterprise.<br />
  8. 8. Weakness<br />Restriction on services: By the restriction imposed by WTO on its monopoly , internet and on ILD services it showed a decline in the market.<br />Political controversy:- As the Tata's justified to extend VSNL activities to the customer services , it led to controversy in the political circle. <br />
  9. 9. Opportunities<br />Improvement:-It was expected that the services quality, price and efficiency might improve for the consumers .<br />Preference in jobs:-The VSNL gives preference to those persons who had skill and attitude for boosting up the shares price.<br />Investment:-In basic telecom sectors investment was better e.g. BSNL and MTNL.<br />
  10. 10. Threats<br />Competitors:- There were several competitors for the VSNL as BSNL and MTNL.<br />Valuation :- The process of disinvestment in these sectors also had and bad effect on privatization.<br />
  11. 11. Ques. 1- Why did new board decide to invest Rs. 1200 crore in TTL?<br />VSNL needs to have a controlling stake in a basic telephone service provider for its own survival in a highly competitive telecom environment.<br /> <br />is to gain access to customers, has no direct access to end customers and is entirely dependant on cellularand basic access providers to route their international traffic through VSNL<br />VSNL’s status as most favored customer of BSNL and MTNL would come to an end 2 years from now.<br />implementation of Customer Access Code (CAC), the company would be at a serious disadvantage with competition from new players<br />
  12. 12. Ques 2.- Privatization of VSNL helped Indians. Justify.<br />The privatisation of VSNL is seen as leading to public expenditure accountability through a realisation of higher return on the government’s asset formation. <br />It also leads to an appreciation of the remaining shares that are held by the government. <br />
  13. 13. Privatization of VSNL provided higher returnon government’s asset formation.<br /> Better quality communications for the citizens.<br /> Stratergicsale is good as it leads to lessconfusion among the governments roles as apolicy formulator and a service provider.<br />
  14. 14. Thank You<br />
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×