Koshika Falters Again On Arrears

Vinay Rai-promoted Koshika Telecom has failed anew to clear its licence fee arrears.

The payment has been delayed due to Koshika's inability to raise funds from financial institutions, sources said. The company was supposed to pay the first instalment of about Rs 200 crore by May 9.

As a result of non-payment of the first tranche, the company now has to pay interest on the outstanding amount at 3 per cent a month from May 9 onwards.

"We are hopeful that we would be able to raise the money by July 24," a source said.

After paying a "notional amount" as part of its acceptance of the offer made by the department of telecommunications (DoT), the company was given 90 days to clear its entire due, amounting to over Rs 400 crore, while 15 days had be given to clear the first instalment.

The DoT offer letter had also put clearance of 40 per cent of the licence fee dues as a pre-condition for connectivity of the operator's network. "The company expects to clear its entire dues in another 10-15 days, but the sooner we pay the better it is," the source said.

"We didn't want immediate connectivity and therefore we have decided to pay the entire amount in one go," he added.

The company has been negotiating with financial institutions (FIs) for funding its payment of licence fee arrears.

Koshika had approached the FIs soon after its shift to the revenue sharing regime had been cleared by the Union cabinet on March 29. The FIs had, however, said that they would only consider Koshika's case after the company received the offer letter from DoT.

Koshika has also withdrawn the pending cases with the Telecom Regulatory Authority of India and the Delhi High Court and a formal intimation has been sent to DoT.

Koshika has also written to customers informing them that the company will soon resume services.

Some customers had filed cases against the government in different courts after Koshika's licences were terminated.

The company also intends to extend its coverage to new cities in the three circles. The expansion process would, however, begin on receipt of DoT go-ahead.

Koshika's licence to operate cellular services in Bihar, Orissa and Uttar Pradesh (West) had been terminated last May.

Last year, DoT had marked Koshika's lien and encashed the operator's bank guaranty worth about Rs 94 crore.