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May 10, 2002 | 1840 IST
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VSNL wants Tata added to name

Arijit De & Reeba Zachariah

Videsh Sanchar Nigam Ltd, which was taken over by the Tata group after the government divested some of its stake in it, could soon see the Tata tag attached to its name. The telecom major has applied to Tata Sons, the owner of the Tata brand, to participate in the Tata brand equity scheme.

Sources in the Tata group said: "Though VSNL has applied to be allowed to subscribe to the scheme, it does not necessarily qualify them for it. An internal team has to evaluate whether it meets all the parameters for qualification."

"Though VSNL can benefit by using the Tata brand name, VSNL by itself is a big brand in India. If it qualifies, it is too early to say how it will leverage the Tata name," they added.

Group companies subscribing to the brand equity scheme have to strictly adhere to certain group-wide standards and a code of ethics and also make a royalty payment to Tata Sons.

Tata companies that subscribe to the scheme are split into two tiers, and the royalty payment is based to the degree of use of the Tata name. While Tata Steel pays a higher royalty, Voltas, which does not directly use the Tata name, pays less. The corpus thus formed invests in promoting the Tata brand in India and outside.

Group-wide initiatives also make it necessary for the companies to adhere to the Tata Business Excellence Model. "Because of the size of VSNL and because it has quite a different culture, it will take long for VSNL to implement these initiatives," Tata sources said.

Infotech company CMC, which Tata Sons acquired from the government, has not applied for participation in the brand equity scheme. "It is functioning virtually like a division of Tata Consultancy Services, which itself is a division of Tata Sons," Tata executives explained.

Some 42 group companies now subscribe to the Tata brand equity scheme. The Tata group comprises over 80 companies spread across various sectors, ranging from steel to automobiles to energy to telecom.

Tata Quality Management Services, a division of Tata Sons, ensures that Tata companies achieve well-defined levels of business excellence using the group's business excellence model. It also has the mandate of institutionalising the model within companies that sign the Tata brand equity and promotion agreement.

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