Hughes Ispat Basic Service This Month Il Becomes

Hughes Ispat Ltd, the basic telecom licencee in Maharashtra is scheduled to commence services in the state on October 30. It will become the second basic telecom licencee, after Bharti Telenet in Madhya Pradesh, to start offering basic services in India.

The Hughes Network Systems-Altel-Ispat group joint venture has put in place a 30,000-line capacity telephone exchange serving Mumbai, Navi Mumbai and Pune, Hughes Network Systems president Pradman Kaul said yesterday.

While blaming the delay in financing the project on May nuclear tests in May and the US economic sanctions thereafter Kaul said, "We are going ahead with the project despite the delays and this reflects our commitment to the project. Sponsors have pumped in equity to the tune of $180 million."

 

In the joint venture, Ispat group owns 51 per cent equity, Huges Network 35 per cent and Altel 14 per cent. Hughes Ispat expects to have a capacity of 500,000-600,000 lines over a period of three years.

At the end of the 15-year license period, the company hopes to have some 3.5 million subscribers, Kaul revealed, which he felt was conservative given the state's population of 80 million.

$250 million has been invested in the project till date, he added. This includes vendor credit of some $70 million brought in by Hughes Electronics, Japanese NEC and Altel Corp.

Bharti Telenet, a joint venture of the Delhi-based Bharti group and STET of Italy, started services in Madhya Pradesh on June 4.

Four other companies including, Reliance Telecom in Gujarat, Tata Teleservices (Andhra Pradesh), Essar Commvision (Punjab) and Telelink Networks (Rajasthan) have signed licence agreements, but are yet to start services.

Tata Teleservices and Reliance Telecom hope to start services early next year, although the latter has not finalised an equipment vendor for its network in Gujarat. Essar Commvision is also yet to finalise an equipment vendor for its telecom operating licence in Punjab.

On September 30, Huges Ispat signed the licence and interconnect agreements with the department of telecommunications and paid the first instalment of Rs 397.50 crore of the licence fees.

It has, however, not signed the pacts for Karnataka, the second circle it holds a letter of intent in. It has committed to pay Rs 13,909 crore in licence fees to the government over 15 years.