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Holding company-subsidiaries structure for DoT proposed

Communications Minister Beni Prasad Verma revealed in Singapore last week that the DoT restructuring programme would follow the corporation plan of the Mahanagar Telephone Nigam Limited, India's government-owned telephone company.

Telecom Secretary A V Gokak has not set a schedule for the corporatisation programme but other DoT officials predict that the exercise will start within two years "barring lack of political will". Although the final sequence of the restructuring process has not been finalised, sources say the corporatisation would transfer DoT's assets to the proposed operating companies, which would be fully owned by the holding company.

This is the first time that the DoT brass has officially expressed its intentions to corporatise the department. Former telecom secretary R K Takkar had, last year, said that the ultimate goal of the restructuring programme would be privatisation of the corporatised DoT. Officials, however, do not want to comment on the aspect of the restructuring programme.

The final structure of the corporation has not been decided yet. This is being held up because a final decision on the exact function of each of the operating companies has not been finalised. For instance, an earlier proposal that the country adopt four regional operating companies - as suggested by the Athreya Committee which looked into reform of the telecom system in the country in 1990 - is facing hurdles because of expansion in rural and other non-lucrative markets.

"We have not finalised the structure precisely because of this problem. For example, if there is an operating company in the east, which will include the north-east region, this will obviously not make profits. Who will pay for development in the region then?" a DoT official queried.

The Athreya Committee had suggested that DoT - including networks of Delhi and Bombay, which fall under the MTNL - should be restructured into six corporations: India Telecom Operating Corporation as holding company; four zonal telecom operating corporations with headquarters at Delhi, Bombay, Calcutta and Madras and one long-distance service corporation.

- Compiled from the Indian media

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