Tata Teleservices, the basic services venture between Bell Canada and the Tata group, plans to start operations in Andhra Pradesh by early 1999.
Company executives said services would first begin in Hyderabad and later be extended to other parts of the state. Estimated to cost $900 million, the project will be financed on a 50:50 debt-equity ratio. Tata Lucent will implement the Rs 1,300 crore turnkey contract for installing the backbone, switches and the optical fibre lines. The network will be a combination of microwave and fibre optic cabling. Department of telecommunications (DoT) estimates the market will grow to five million lines over the next year 15 years.
"As of now, the waiting list in the state is roughly 200,000. We expect to capitalise on this initially. Further, we will attract and even retain some of the large organisations," the executive said. Tata Teleservices is committed to pay a total licence fee of Rs 4,200 crore over 15 years, of which it has already paid Rs 120 60 crore as the first instalment. According to the executive, "The primary period of the project is 15 years with a renewal period of another five years." Bell Canada holds 39 per cent of the 49 per cent equity holding and American International Group holds the other 10 per cent. The Tata group owns 51 per cent.
