MTNL bids for Lanka''s fixed wireless operator Suntel

The state-run Mahanagar Telephone Nigam Ltd (MTNL) has submitted a bid to acquire Sri Lankan fixed-line wireless operator Suntel, for $100 to 120 million. If successful, this would be its first overseas takeover. The price factors in a legal case worth LKR4 billion (Sri Lankan rupees) involving a customer, sources said.

Other contenders for Suntel include Malaysia Telekom, a consortium led by John Keells Holdings and the Tata-controlled VSNL. If MTNL acquires the company, it will take on a local partner, the sources added.

The result of the bids is expected in the next fortnight. The privately-owned Suntel has three lakh subscribers, and an NLD / ILD license. The acquisition would give the successful bidder leverage on data services, fixed lines and a host of corporate and small-and-medium business (SME) customers.

The company also operates in Nepal and the Maldives on licences. Its medium-term debentures are listed on the Colombo Stock Exchange. Suntel has recently filed a petition against Electrotek Network Services to recover LKR69.3 million for telecom services rendered to the company, but that it faced a counter suit of over LKR4 billion for terminating the telephone services.

Suntel posted a net profit of LKR311 million for the half year ending June 2007. Revenue rose to LKR3,600 million from LKR3,300 million in the first half of 2006.