State-owned Bharat Sanchar Nigam Ltd (BSNL) said on Tuesday it could use its Rs 30,000-crore cash reserves to look for acquisitions in Africa, where it plans to seek expansion of business.
“We have a cash balance of over Rs 30,000 crore with us and BSNL has already got a go-ahead from the government to apply for overseas licenses,” Kuldeep Goyal, its chairman and managing director, told a news conference in New Delhi.
Earlier, Goyal had told the Hindustan Times that Africa provides a good opportunity due to its low teledensity and high average revenue per user.
India has a teledensity (number of telephones for a population of 100) of about 40 per cent, while in many African countries tele-density is below 20 per cent. Average revenue per user (ARPU) is in the range of Rs 250 per month in India, while some African markets offer three times that amount.
“We are looking at various options, whether it is new licences being issued or partnering with existing players in the overseas markets,” said Goyal. “South Africa is one of the potential markets for acquisitions.”
BSNL has already shortlisted eight consultants, including Ernst & Young, McKinsey, KPMG and PriceWaterHouseCoopers, for its plans of mergers and acquisitions, strategic partnerships and overseas forays.
According to company sources, BSNL has also put British Tele Consults, Value Partners, PRPM Consults and Diamond Management and Technology Consultants on a panel to help its global forays.
Mahanagar Telephone Nigam Ltd (MTNL), another PSU is also planning a foray into African markets. The company is evaluating a proposal to buy equity in four markets.