Dot To Change Bidding Norms To Accommodate Worldtel Offer

Stable policy, transparency hold key to attracting investment

The department of telecommunications (DoT) will make changes in the guidelines for the fourth round of bidding expected in a few months for basic telecom services which will allow it to accept a proposed $3 billion (over Rs 10,000 crore) WorldTel project to start telecom services in West Bengal, Uttar Pradesh (East) and Kerala.

DoT is also believed to be reworking the reserve prices a floor on the licence fee expected from each telecom circle for the fourth round of bidding. The circles going to be open for bidding are Uttar Pradesh (east), Himachal Pradesh, North East, Assam, West Bengal, Kerala, Andaman and Nicobar Islands and Jammu and Kashmir. The prices are expected to be significantly reduced.

 

Telecom secretary A V Gokak did not confirm the reduction in reserve prices. On the WorldTel proposal, he told Business Standard here that DoT had not finalised the exact nature and wording of the proposed changes in the guidelines for the fourth round of bidding.

But, it is expected that it will include a proviso which will allow a government undertaking (like Telecom Consultants India Ltd or DoT itself) to start a joint venture with WorldTel or other institutions willing to finance telecom expansion in the country.

A brainchild of the International Telecommunication Union (ITU), WorldTel is a telecom finance institution with GE Capital, American International Group, Kuwait Investments and Natwest Markets as its principal shareholders. The institution is headed by Sam Pitroda, former chairman of the Telecom Commission.

The WorldTel proposal envisages a $3 billion project for the three states. Uttar Pradesh (East) with one of the lowest teledensities (number of telephones per 100 people) in the country is expected to soak about $1.2 billion (Rs 4,320 crore), with the remaining $1.8 billion (Rs 6,480 crore) being invested in Kerala and West Bengal.