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June 30, 2001
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Money > Business Headlines > Report June 30, 2001 |
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57 bids only for 4th cell operator licenceBS Economy Bureau The government has received a lukewarm response for the fourth cellular operator berths with only seven companies evincing interest on the last day for submitting bids for 21 circles, including the four metro circles. While Reliance accounted for 30 of the total 57 bids, companies including HFCL, ModiCorp and Shyam Telecom stayed out of the race. The newly-formed cellular behemoth, BPL Birla-AT&T-Tata , has bid for just three circles. Multinational companies also were conspicuous by their relative absence. There were no new companies in the fray. Of the 21 telecom circles for which bids were invited, only 17 circles attracted bids. Except for Himachal Pradesh for which Escotel has placed a bid, none of the other C circles including Bihar, Orissa, West Bengal and North-east elicited a response. According to analysts, this time around even the lucrative metro circles are unlikely to fetch fancy valuations like they did in 1995 when the sector was opened up. While four companies bid for Delhi and Madras, Bombay and Calcutta got three each. Surprisingly, Punjab which is a Circle B state received 4 bids, primarily because the new entrant will essentially be the second operator as only Spice is operating there currently. The government, however, in a press statement played down the lacklustre response. "We have received 57 bids in spite of the fact that the existing operators have established themselves in the cellular market and are experiencing a healthy growth in subscribers." Interestingly, Reliance has bid for 15 identical circles under two different companies, Reliance Communication and Reliable Internet Services. Reliance Communication, in which Reliance Industries has a stake has put in bids for Delhi, Madras, Bombay, Andhra Pradesh, Gujarat, Haryana, Karnataka, Kerala, Maharashtra, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh (east) and Uttar Pradesh (west). Reliable Internet Services, in which Reliance Capital and Reliance Telecom are stakeholders, has also bid for the same 15 circles. The newly formed Birla, AT&T, Tata, BPL combine have bid in just three circles-Delhi, Madras and Karnataka. This will essentially strengthen their foothold in the southern region as they already have a presence in Maharashtra, Goa, Bombay, Andhra, Tamil Nadu and Kerala. Ravi Ruia of the Essar Group said, "We have bid in four circles through Barakhamba Sales and Services, which is a 100 per cent subsidiary of Essar Hutchison joint venture company Sterling Cellular." An interesting aspect is that JT Mobile, mired in controversy for failing to pay up its dues for the Punjab Cellular licence, has reemerged under the name Indomobile to bid again for the Punjab circle. Others who have entered bids include Bharti Cellular which has applied for 11 circles-- Bombay, Calcutta, Gujarat, Haryana, Kerala, Madhya Pradesh, Maharashtra, Rajasthan, Tamil Nadu, Uttar Pradesh (east) and Uttar Pradesh (west). Explaining the rationale for bidding under two companies, sources said it was done as a safety measure against any probability of disqualification on account of error in application or not meeting the eligibility criteria. The Rajan Nanda-promoted Escotel has bid for 8 circles including Delhi, Gujarat, Himachal Pradesh, Karnataka, Punjab, Rajasthan, Tamil Nadu and Uttar Pradesh (east). Modicorp, promoters of Spice Telecom, surprisingly was conspicuous by their absence. In a press statement, the company said "The uncertainty in the telecom policy environment where the issues of limited mobility, revenue sharing inter-connect agreement, calling party pays, spectrum charges are not yet resolved has led to the erosion of the business viability of cellular projects. Modicorp thus feels that acquisition of a fourth operator's licence for cellular service does not guarantee reasonable returns to its business." The list of bidders who qualified will be announced on July 9 and the first stage of financial bids will be opened on July 11. The three-stage bidding process is scheduled to be completed by July 19 and fresh licences are expected to be signed by the end of August. Powered by YOU MAY ALSO WANT TO READ:
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