AS the failure of Videsh Sanchar Nigam Ltd's (VSNL) global depositary receipt continues to cast a pall over the emerging market sector, the next big test is already approaching. How the international investment community view the merits of Indosat - like VSNL, a state-controlled telecommunications giant - will be another key indicator in the immediate future for large scale flotations. It will also be closely watched by all countries expecting to sell off their state enterprises in pursuit of the Thatcherisation of their economies. Equally, it will be a test for lead underwriter Merrill Lynch. When the beauty parade for the lead manager of this key issue began, few of the contestants could have foreseen that the Asian economic miracle story - which was enjoying such a strong audience among US equity investors - was coming to a very different chapter. The deal was won by a combined effort out of New York and Hong Kong. Merrill fielded Dan Reingold, its top telecommunications analyst from New York. He and other colleagues from the Big Apple linked up with specialists from Hong Kong, led by Peter Clarke, chairman of the group's Asia-Pacific division in the territory. The competition was stiff, but compared to the task that lies ahead, winning the mandate could turn out to be the easy part.