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India clears 76 fixed-line phone bidders

India has cleared a total of 76 applications from private companies to start fixed-line telephone services across the country, a government official said on Monday.

"The government has issued 76 letters of intent so far. Twenty-one have been rejected," the official in the telecom ministry said.

These letters of intent or preliminary approvals will be converted to licences once the firms pay entry fees and provide bank guarantees.

Private firms which have received preliminary approvals include Aircel Digilink India Ltd, Bharti Telenet Ltd, Reliance Communications Ltd, Birla-AT&T, Tata Teleservices and Himachal Futuristic Communications Ltd.

The government had received 147 applications from companies to start fixed-line services after it earlier this year announced a new policy to attract investments into the sector.

The government in January threw open the fixed-line business to an unlimited number of firms in each of the 21 telecom circles. Earlier, only one private firm was allowed to compete with an existing state-run player in each circle.

The applicants included a host of Indian private corporate groups and state-run telecom giants such as MTNL, VSNL, BSNL and Telecom Consultants India Ltd.

The government rejected the applications of the state-run telecom companies saying it did not want them to compete with each other.

Fixed-line telephony has so far been the preserve of state-run Mahanagar Telephone Nigam Ltd which operates in Bombay and New Delhi, and Bharat Sanchar Nigam Ltd, a state-owned giant which serves the rest of the country. The official said the government had not decided on applications for 50 licences put in by mobile companies BPL Cellular and BPL Mobile, Shyam Telecom, Aircel Ltd, Sterling Cellular, Fascel, SitiCable and ModiCorp.

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