Paging Cos Seek Exit From States

Unable to sustain mounting losses, some of the radio paging services companies are on the lookout for options to surrender their licences for the state circles.

Microwave Communications Ltd (MCL), radio paging services provider under the brand name Pagelink, has already approached the department of telecommunications (DoT) to allow a one-time graceful exit to paging services licen-ce holders for the state circles. Other operators are likely to follow suit.

Pagelink, which has the paging licence for Uttar Pradesh, Bihar and Orissa, is awaiting a nod from the DoT in this regard. "If the approval comes we will surrender our Uttar Pradesh licence," said Deepak Malhotra, chairman & managing director of MCL and vice-president Indian Paging Services Association.

The move comes in the light of the fact that paging companies are nursing massive losses from their existing operations in the cities and starting up networks in smaller towns will greatly escalate the losses. A lot of funds have been blocked as licence fees for the state circles which also call for bank guarantees. By surrendering their licences, the operators can get back the margin money to meet working capital requirements. "Also, the sanctions on India in the wake of nuclear blasts have further dampened the chances of getting foreign investment in paging services," said a top official of Modi Korea Telecom Ltd.

Some of the top paging operators like DSS Mobile Commun-ications Ltd, Modi Korea Telecom and MCL, following the south-east Asian crisis, have been scouting for investment partners in the US and the western countries to infuse fresh funds. The paging industry in the country still remains grim and, of late, most of the paging operators are facing an increase in payment defaults from the subscribers.

However, the recent conferring of industry status on paging services will help the operators raise funds from institutions and ease flow of working capital requirements.

Some of the recent demands which the paging operators have placed before the DoT include extending the period of licence from 10 to 20 years, moratorium on paying licence fee for the fifth and sixth years for operators who have paid the first three years of licence, and revenue sharing with DoT and other technical issues like allowing use of very small aperture terminals (Vsats) for paging messages.