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Suspicion!

Politics invades business as BJP squints at Wipro-BT split

The Bharatiya Janata Party, which raised the issue, asked if the split would result in losses for Wipro, the Indian partner in the joint venture.

BJP members specifically sought information on the financial details of the break-up.

The BJP also asked for details about the new partner, Bharti Telecom, which is tipped to replace Wipro in a new joint venture.

The issue assumes significance as BT is discussing a possible joint venture with the government-owned Videsh Sanchar Nigam Limited. It is also learnt that BT is preparing its responses to the questions raised in Parliament.

Wipro Corporation and British Telecom had decided to split after a strategic review of the business. The two businesses, Value Added Network Services or VANS and Very Small Aperture Terminal Services or VSATS, are to be split and handed over to Wipro and BT respectively, based on their core competencies.

Meanwhile, BT is concluding discussions with Bharti Telecom. The joint venture with Bharti Telecom is a continuation of an earlier deal signed between the two companies by which BT acquired a 22 per cent stake in AirTel, a cellular service company in Delhi controlled by Bharti Telecom.

The Wipro-BT split is likely to be formalised shortly at which point Bharti Telecom will join the venture.

The split became inevitable after the joint venture company, already a year behind schedule, toted up accumulated losses of Rs 210 million. Each partner was to bring in Rs 1 billion. Wipro was unable to come up with its share.

Wipro-BT officials are silent about details of the split or the new partner likely to replace Wipro. Informed sources say BT may write off the entire accumulated loss at Wipro-BT prior to winding up the venture. Consequently, Wipro-BT is likely to post profits for 1996-97.

BT will concentrate on VSAT activities in line with its international business. It has a global satellite network of which the new Indian venture will become a part. BT has made a bid to acquire MCI, a US telecom company.

- Compiled from the Indian media

Earlier: Wipro, BT war gives birth to Wipro VANS

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