The largest power utility Tata Power Company (TPC) is all set to emerge as a major player in the country’s telecom sector, earning more than 16 per cent rate of return as compared to that of its core power business.

"Though power remains our core business, there are no bankable or viable projects as of now. We have very strong cash flows and after taking a cautious approach we decided to invest in the telecom sector, which has a rate of return more than 16 per cent, higher than that in the power sector," TPC managing director Firdose Vandrevala said here on Sunday.

The 52-year-old former executive of Tata Steel in his first interaction with the media after taking over the helm of TPC, said he wants to metamorphise TPC’s once Mumbai-centric profile into a National player in the power sector with special interests in telecommunications, broadband and energy. Justifying TPC’s investment in the sector, he said it was not like a hydro power project in which funds are tied up for years together till completion. And investment in telecom is, however, very flexible, and any fresh exposure will depend on the returns, he added.

"I see no reason why TPC is being criticised for its investment in Tata Teleservices. The telecom sector today poses a unique opportunity and instead of being a carrier’s carrier across the country. We chose this route," he said.

Tata Power has also invested Rs 500 crore in Panatone Investments, a special purpose vehicle, through which Tatas acquired Videsh Sanchar Nigam Ltd (VSNL).

According to Vandrevala, TPC has its "watcher" for power sector ready, but presently due to the continuous downslide in the sector the company has decided "to take a business risk in telecom, albiet by investing within the Tata Group and strengthening its presence in the country."