Setback For Infotech India Nepal Venture

A bid by Usha group's Information Technology India Ltd (ITIL) to provide cellular, basic and international telecom services in Nepal is in limbo after the Nepal Traders Federation challenged in court the decision to open telecom services to private operators.

The company was among the three global consortia shortlisted for financial bids to provide services. The other two consortia are from Japan (a group comprising Nippon Telegraph & Telephone, KDD and Mitsubishi) and Sweden (a consortium led by Telia).

The three consortia had been shortlisted for the financial bids stage after successfully competing in the technical evaluation stage in which five consortia participated.

 

The ousted groups are led by Telecom Authority of Thailand and Piltel of Philippines.

ITIL has been aggressively targetting the Nepal telecom services licence since another group company Koshika Telecom holds the cellular licences in Indian states Uttar Pradesh and Bihar which share a common border with Nepal.

Another associate company has won a letter of intent to operate basic telecom services in Bihar. Having telecom networks in contiguous areas reduces networking and operating costs substantially.

Financial bidding is structured in three stages. The maximum bid in the first stage will be used as a 'floor-price' for the second stage. And, the maximum bid in the second stage will be the floor or reserve price for the third stage. The consortium putting in the highest bid in the third stage will be awarded the services licence.

The Himalayan kingdom had advertised for the technical bids more than a year back.

The cost of implementing both cellular and basic services is estimated to be more than of Rs 1,000 crore.

In cellular services, the Nepal government has decided to introduce the GSM (group speciale mobile, a digital standard chosen by India also) standard widely used in Europe.

ITIL was the only Indian company to bid for the project.

Telecom services in Nepal are provided by the government. Due to the paucity of funds, telephone penetration has been very low in the country.

The problem gets compounded due to the hilly terrain which makes laying of cables very difficult.

The Nepalese government hopes to overcome the problem of poor investment and to introduce new technologies by inviting private telecom operators to set up networks.