Techno Telecom Ready To Pay Licence Fees In Stages

Techno Telecom (India) Ltd of the Usha group has proposed an out-of-court settlement with the department of telecommunications (DoT) on the issue of the operating licence for basic telecom services in Bihar. The company had challenged a DoT move to encash its bank guarantees in January 1997.

Under the terms of the proposed settlement, Techno Telecom _ the letter of intent (LoI) holder in Bihar _ has suggested that it be allowed to pay its first years instalment in two tranches. According to the licence fee commitment, the company is to pay Rs 8.75 crore upfront.

DoT is yet to take a view on the proposal, said sources.

 

In return for permission to restructure its licence fee payment, Techno Telecom wants DoT to release its bid bond. The department has attached the companys Rs 5-crore bid bond when it refused to sign the licence and interconnect agreements in late-1996.

According to the Techno Telecom letter: ...we are now keen to reach an out-of-court settlement and propose...:

l We pay 50 per cent of the first year licence fee by January 31, 1998. (Though this had been proposed by Techno Telecom, DoT is yet to take a decision on the issue.)

l On receipt of the above 50 per cent of the licence fee (amounting to Rs 4.375 crore), DoT will release our bid bond.

l We agree to pay the balance 50 per cent of the licence fee along with interest, and the balance required bank guarantees by June 1998. You are aware that we have already given a Rs 5-crore PBG (performance bank guarantee) to DoT. The licence agreement may be signed on our completing the above formalities.

Communications minister Beni Prasad Verma had set an October 31, 1996, deadline for six companies to sign the pacts. Techno Telecom was one of the three companies that challenged DoT in the Delhi High Court when the department sought to encash their guarantees. Essar Commvision and RPG-led Basic Teleservices were the two other companies.

However, in a volte-face last year, Essar Commvision _ the LoI holder in Punjab _ reached an out-of-court settlement with DoT. It signed the licence and interconnect pacts in November 1997. The companies that accepted the letters of intent served on them were: Hughes Ispat, Tata Teleservices and Reliance Telecom.

The Techno Telecom proposal for an out-of-court settlement with DoT imparts fresh impetus to the process of private entry into basic telecom services. If accepted by the department, Techno Telecom will be the sixth company to sign the licence agreement. It also puts pressure on Basic Teleservices, holding the letter of intent for providing basic telecom services in Tamil Nadu, to decide on an out-of-court settlement with DoT.

The companies that have signed the licence agreement are: Bharti Telenet for Madhya Pradesh, Reliance Telecom (Gujarat), Hughes Ispat (Maharashtra), Tata Teleservices (Andhra Pradesh) and Essar Commvision (Punjab). Hughes Ispat is also expected to sign the pact for Karnataka this year if the Union cabinet allows the floatation of a new company (with the same ownership structure) for the state.

HBTL _ a joint venture between Himachal Futuristic Communications Ltd (HFCL), Bezeq Telecom of Israel, Shinawatra Communications of Thailand, KJMC Financials and Kotak Mahindra Finance Ltd _ holds the LoIs for Delhi, Uttar Pradesh (West), Haryana and Orissa. However, after having won a legal battle with DoT, it intends to implement services only in Haryana.