Rajasthan Basic Loi For Telelink

The department of telecommunications (DoT) on Monday awarded Shyam Telecom-led Telelink Networks the letter of intent (LoI) for providing basic telecom services in Rajasthan, ending two-and-a-half years of uncertainty.

The company has been given 30 days to sign the licence and interconnect agreements.

Although the company emerged the highest bidder (Rs 1,110 crore) in the first round of bidding in mid-1995, DoT had not issued the LoI because of errors in its own evaluation procedure.

In absolute terms, this bid was less than the reserve price of Rs 1,700 crore; but in net present value (NPV) terms (Rs 450 crore) it was more than the reserve price NPV (Rs 370 crore).

 

Telelink Networks is a joint venture between Shyam Telecom which holds 80 per cent, Harris Farnone of Canada (10 per cent) and Guangdong PTT (10 per cent). Hyderabad-based Advanced Radio Masts was also a partner in the consortium, but pulled out last year after its name got involved in an alleged corruption scam with former Union communications minister Sukh Ram.

During the last two-and-a-half years, the case of Telelink Networks was shuttling between DoT, the law ministry, the committee of secretaries and the Union cabinet.

The law ministry had opposed the award of the LoI to the company first, but then reversed its opinion when DoT asked it for a second opinion.

The case was then transferred to the committee of secretaries which gave its seal of approval. The proposal then hanged in balance with the cabinet not being able to take it up in several of its sittings.

Finally late last month, the cabinet cleared the proposal, which was vetted by communications minister Beni Prasad Verma.

Telelink Networks intends to invest Rs 1,000 crore in the first five years of the 15-year licence period. It will install 30,000 telephone lines covering 15 towns and cover 6,000 villages in the first year.

The total number of lines will go up to 225,000 and new services will include ISDN, cable television and boradband data, according to a company press release.

The departments issual of the LoI makes Telelink Networks the ninth company awarded the right to operate basic telecom services in the country. Other companies which have been awarded LoIs are: HFCL-Bezeq Telecom, Hughes Ispat, Tata Teleservices, Essar Commvision, Reliance Telecom Techno Telecom, Basic Teleservices and Bharti Telenet.

Although these nine companies account for 13 circles, companies have signed licence agreements in only five circles.

HFCL-Bezeq Telecom, for instance, won the right to operate basic services in four circles, it has decided to implement networks in Haryana only after winning a case against DoT.

Hughes Ispat, the winning consortium in Maharashtra and Karnataka, has signed the agreement in only the first state.

It is expected to sign the pact for Karnataka after the government clears a proposal to spin off the circle into a separate company.

Tata Teleservices holds the licence for Andhra Pradesh circle, Essar Commvision for Punjab, Reliance Telecom (Gujarat) and Bharti Telenet in Madhya Pradesh.

Usha groups Techno Telecom and RPG-led Basic Teleservices are fighting a legal battle with DoT over the latters attempt to encash the companies guarantees.