Taking up strategic importance, India’s most prosperous businessman, Mukesh Ambani, has lined up to buy Sri Lankan government mobile phones. Jio Platforms, the telecom arm of Reliance Industries, has shown interest in buying a stake in state-owned telecom company Sri Lanka Telecom PLC.
The financially stressed Sri Lankan government is looking to privatize several sectors of the economy to raise funds. Colombo had invited proposals from potential investors starting November 10. In which Jio has also applied.
Jio Race With Three Companies
According to the report, apart from Jio, two more foreign companies have placed their bid to buy the Sri Lankan government telephone company. After the deadline for bidding ended on January 12, the Sri Lankan government issued a press release in which Jio Platform, Gortune International Investment Holding Ltd, and Pettigo Comercio International LDA were named as three potential bidders.
The proposals “will be evaluated as per specific guidelines”, and the Cabinet has approved the disinvestment of state-owned enterprises of Ministers, the press release said.
The island nation Sri Lanka has also been mandated by International Monetary Fund (IMF) programs to push for the privatization of non-core sectors.
Bidding for a Sri Lankan government company is essential not only from a business point of view but also from a strategic point of view because it will allow the expansion of an Indian company in the market of India’s neighbouring country in the Indian Ocean also in the future. Any attempt by China to enter the Sri Lankan telecom sector can also be stopped.
Brokerage company BofA has estimated the valuation of Jio Platforms to be $107 billion. BofA said in a note that it expects Jio Platforms to continue to add customers this year by making deeper penetration with its advanced feature phone JioBharat and wireless broadband device JioAirFiber.
According to the report, the Government of Sri Lanka has about 49 and a half per cent stake in Sri Lankan Telecom Company PLC, while about 45 per cent stake is with Global Telecommunication Holdings. At the same time, the Government of Sri Lanka has decided to sell its stake.
