(20 June 2006 7:30 pm)

MUMBAI: The telecom sector is attracting investments not only in the global market but also in India. Citigroup Inc. has acquired a 6.3 per cent stake in telecom service provider Videsh Sanchar Nigam Ltd (VSNL).

Disclosing this in a filing with the Securities and Exchange Commission, Citigroup has said that it now owns 18.61 million shares of VSNL. The The stake was bought through American Depositary Receipts listed on the New York Stock Exchange.

VSNL expects to see volume growth in voice and data business. The company recently bought out the internet assets of 7 Star, a Mumbai-based cable operator. VSNL also acquired for Rs 750 million Direct Internet Ltd and its wholly owned subsidiary Primus Telecommunications India Ltd to strengthen its broadband presence in the Small and Medium Enterprises (SME) segment.

The phone market is expanding rapidly in India. This has attracted global giants like Vodafone Group which bought a 10 per cent stake in Bharti Tele-Ventures.