Fujitsu In Parleys With Essar Comm: Equipment Supply

Japanese telecom and electronics major Fujitsu is negotiating with Essar Commvision, the basic telecom letter of intent holder for Punjab, for an equipment supply contract and an equity stake in the Ruias-promoted company.

Sources in Fujitsu India Telecom confirmed the negotiations while Essar executives said they were talking to a number of equipment suppliers and Fujitsu was only one of them. Also, they refused to confirm the talks of sale of equity. The size of the deal is expected to be in the region of some Rs 600-700 crore. This will include the supply of exchanges, fibre-optic cables, microwave radio, associated equipment and the local access loop, the part of the network connecting subscribers to the nearest exchange.

 

Preliminary project reports of Essar Commvision envisaged a 900-km fibre optic ring through key cities in Punjab with several exchanges located at points with high call traffic.

Spurs or offshoots from the fibre optic ring would connect low-capacity exchanges in small cities and towns.

The company has finalised a Rs 1,000-crore financing plan for funding the project. Of this, some Rs 350-crore will be pumped in as equity by the promoters -- the Ruias, Bell Atlantic (holding 10 per cent equity) and other foreign investors.

Another Rs 350-crore was to have been raised by way of external commercial borrowings. The remaining Rs 300 crore will be sourced from domestic lenders and suppliers in the form of vendor credit. Like other international vendors, Fujitsu has been negotiating with basic telecom companies for supplying equipment and setting up networks.

According to unconfirmed reports, the vendor has also been holding preliminary discussions with Basic Teleservices, the RPG-led basic telecom licensee which holds the letter of intent for Tamil Nadu. The world's largest telecom services company NT&T holds 49 per cent stake in Basic Teleservices.

Essar Commv-ision's bid to provide basic telecom services in Punjab has temporarily suffered a setback with the department of telecommunications (DoT) trying to encash the company's bank guarantees.

The company has challenged the move in the Delhi high court.