Bpl Bid To Raise $400 M To Finance Cell Services Work
The BPL group plans to raise $400 million worth syndicated loan to part-finance the implementation of cellular services in three states and Mumbai.
Rajeev Chandrasekhar, chairman and managing director of BPL Mobile Communications Ltd, said the syndication will be kick-started in January next year and three arrangers will soon be appointed. This is expected to complete the funding for BPLs telecom plans.
BPL Mobile Communications Ltd, and BPL-US West Cellular Ltd operate licences in Kerala, Tamil Nadu and Maharashtra and Mumbai city.
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Chandra-sekhar said the services have already started operating in the three states and have a subscriber base of 36,000. In Mumbai, the subscriber base is just over 90,000.
Chandrasekhar attacked the governments decision to allow Mahanagar Telephone Nigam Ltd (MTNL), to operate cellular services in Mumbai and Delhi.
The decision has become controversial because it bypasses TRAI, (Telecom Regulatory Authrority of India Ltd) set up primarily to protect the interests of consumers, investors and the private sector, he said.
We dont know the conditions and terms under which MTNL is being allowed to operate cellular services. Are they paying licence fees? Will they subsidise the cellular services with their fixed network revenues. It sends wrong signals to foreign investors, he added.
Private cellular operators are afraid that if MTNL is allowed to cross-subsidise then it will lead to a situation where MTNL goes on a spree to grab market share and drive down profitability of other operators. Globally, fixed network and cellular operators are different.
We are looking at various options including legal of dealing with the issue. We will decide soon, Chandrasekhar added.
BPL Mobile Communications is 74 per cent owned by BPL Cellular Holdings Ltd, the holding company of the entire BPL telecom business. The remaining 26 per cent is being owned by France Telecom.
The companys other business includes BPL US West Cellular, where 51 per cent is being owned by BPL Cellular Holdings. US West holds the rest.
In BPL Cellular Holdings, the BPL group holds majority control, while foreign investors like AIG of US, Peregrine and Common-wealth Development Corporation (CDC), hold 29 per cent.
Private cellular operators are afraid that if MTNL is allowed to cross-subsidise then it will lead to a situation where MTNL goes on a spree to grab market share and drive down profitability of other operators