Corporates Keen On Fourth Round Telecom Bidding

Several corporates in the country are preparing to enter basic telecom services in the country when the fourth round of bidding for private entry into the sector takes place. Among them are big names like Reliance and Tatas and telecom companies like the Delhi-based Bharti and south-based (Siva Sankaran's) Sterling group of companies. Mahanagar Telephone Nigam Ltd (MTNL, the basic telecom services company in Delhi and Mumbai) may also participate in the process, sources added.

The department of telecommunications (DoT) is planning to call for a fourth round of bidding for provision of basic telecom services in seven telecom circles (mostly analogous to a state) before the end of the year. Intially, DoT senior officials were planning to conduct the fourth round of bidding in June-July this year.

The circles likely to be up for bidding are Kerala, West Bengal, Uttar Pradesh (East), North-East, Assam, Himachal Pradesh and Andaman & Nicobar Islands. Senior officials of the department said DoT was yet to take a decision on whether to include the state of Jammu & Kashmir in the bidding list or not. The government does not want to have private entry into the telecom sector in the state due to security reasons.

DoT plans to hold a two-stage selection process in the fourth round of bidding. This will involve a preliminary techno-commercial selection process and a second financial bidding stage. The first round of bidding for telecom services was held in January 1995, the second one a year later and the third in May 1996. In these rounds, just six companies have signed licence and interconnect agreements with DoT.

One another company -- Techno Telecom which was the successful bidder in Bihar -- is yet to sign the pacts although it has accepted a letter of intent for the purpose from DoT. The bidder for Karnataka, Hughes Ispat, has not finalised whether it wants to accept the government offer of the Karnataka basic telecom licence.

Himchal Futuristic Communications Ltd (HFCL), the successful bidder to operate services in Delhi, Uttar Pradesh (West), Haryana and Orissa, won a case earlier this year against DoT which tried to encash its bank guarantees. The company has offered to implement a basic telecom network in Haryana, a proposal upon which DoT has not made up its mind.

It has been indicated by top DoT officials in the past that the department might allow public sector units like the proposed joint venture between Mahanagar Telephone Nigam Ltd (MTNL, the fixed-line services provider in Delhi and Mumbai) and Telecom Consultants India Ltd (TCIL, a turnkey unit offering services primarily outside the country) to bid for basic telecom networks in the circles.

Earlier, the department was planning forge a joint venture with WorldTel, a telecom finance insitution promoted by the International Telecommunication Union. WorldTel is headed by Sam Pitroda, formerly the chairperson of the Telecom Commision, the nin-member apex body of DoT and has sent a proposal to start basic telecom services in three circles: Uttar Pradesh (East), West Bengal and Kerala. This, however, seems to have died a quiet death following delays on part of DoT to clear the proposal.