RPG-led Basic Teleservices will pay Rs 50 crore in bank guarantee to the department of telecommunications (DoT) following its decision to pull out of the basic telecom services project in Tamil Nadu. The company is a joint venture between the RPG group and Japan's NTT and Itochu.
RPG group chairman Rama Prasad Goenka told Business Standard on Wednesday the company would pull out of the Tamil Nadu basic telecom project because it was "too big". "But, we are trying that we don't have to pay the default money," he said.
Goenka said frequent changes in DoT rules and the size of the project had forced his company to pull out. The company had bid over Rs 11,000 crore in licence fees to be paid over 15 years. The project was expected to cost Rs 4,200 crore in the first five years.
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However, the Calcutta-based group's two cellular ventures _ RPG Cellular in Chennai and Cellcom in Madhya Pradesh _ and other telecom projects were doing well, the chairman added.
Besides its basic and cellular ventures, the RPG group has a presence in radio paging, satellite-based very small aperture terminal (Vsat) data and electronic mail services.
The group's telecom business is structured under two tiers of holding companies. It controls its telecom services projects through holding company RPG Communications, which has two subsidiaries, RPG Telephony and RPG Mobile.
RPG Telephony, in turn, is the holding company for the group's basic telecom service, Vsat and public data network projects. And RPG Mobile is the holding company for cellular and paging businesses.
Another group company, RPG Satcom, holds a Vsat licence. Sprint-RPG, a 51:49 joint venture between the group and Sprint Communications of the US, is the country's largest private electronic mail service provider.
RPG Cellular Services operates in Chennai and Tamil Nadu. Cellular Communications India is a cellular licencee in Madhya Pradesh.
The group also has a presence in paging services through licences in Delhi, Chennai and Ahmedabad.
International Finance Corporation has a 24.99 per cent stake in RPG Communications, the apex holding company of the group's telecom businesses. The private arm of the World Bank had pledged $8.3 million, of which $6.3 million has already been brought in.