The Indian Techonomist

(C) Copyright 1995 Deus X Machina, All rights reserved

Indian telecom privatisation bids

BASIC SERVICES - OPENED BIDS
CELLULAR SERVICES - OPENED BIDS

India's Department of Telecommunications (DoT) doesn't just form and implement government policy. It operates, as a monopoly, India's entire phone network. Hungry for money, it is in the process of privatising. It will create an independent telecom regulatory authority, to manage cellular services - two private operators in competition in each zone, and basic telephony services.

Scared that the DoT's half a million employees may go on strike, the DoT will not itself be privatised. It will compete with one private operator in each zone, or circle - to use their preferred term. On June 7th and June 23rd the DoT announced the bids for cellular and basic services respectively. Licences for cellular services in major cities were awarded to private companies last year.

On August 5th, the government opened the financial bids for cellular services, listed below. On August 31st, it opened the bids for basic telecom services, also listed below.


CELLULAR SERVICES - OPENED BIDS

The top two bidders are listed here for each circle, followed by a list of the other bids. Contracts were to be awarded to two companies in each circle - the second highest bidder would be given the opportunity to match the highest bid, followed by the third highest bidder, and so on (so that the two eventual licensees pay the same fee). The huge gaps between bids in many circles has posed problems. Now there will probably be caps in the number of circles given to a single operator. Surprisingly, top bidders appear to be in favour of this, as they would like to concentrate on some circles and save on licence fees. Low bidders want caps too, of course, or they will get no licences.

It is not clear whether the bidders will be involved in the decision as to which circles they give up and which they retain, and if they do give up a circle, then whether their high (but now retracted) bid will have to be matched by other potential licencees for that circle. This is not going to be sorted out till the bids for basic services are opened, probably in early October, as providers would naturally prefer to offer cellular services in circles for which they are likely to win basic service licences as well.


Values rounded to the nearest million dollars.

Circles	Bidder 1	Value	 Bidder 2	Value
Group A				
AP -    JT MOBILE         319    BPL              308
GU -    BIRLA             571    BPL              393
KA -    MODI              444    (a) BIRLA        420
                                 (b) JT MOBILE    420
MA -    BIRLA             528    BPL              466
TN -    BPL               266    HINDUJA-HCL      172
Group B				
HA -    ESCORTEL           78    AIRCEL DIGILINK   76
KE -    BPL               165    ESCORTEL         123
MP -    CELLULAR COMM      19    RELIANCE           2
PU -    MODI              403    JT MOBILE        291
RA -    MODI              122    AIRCEL DIGILINK   67
UE -    MODI               72    KOSHIKA TELECOM   67
UW -    ESCORTEL          129    KOSHIKA TELECOM   82
WB -    RELIANCE           13    (sole bidder)	
Group C				
AN -    (no bids)			
AS -    RELIANCE          0.4    (sole bidder)	
BI -    KOSHIKA TELECOM    43    RELIANCE         0.8
HP -    BHARTI TELENET      5    RELIANCE         0.4
JK -    (no bids)			
NE -    HEXACOM INDIA     0.5    RELIANCE         0.4
OR -    KOSHIKA TELECOM    28    RELIANCE         0.8

BASIC SERVICES - OPENED BIDS

For circles (regions) graded A, B and C by the government.


Values rounded to the nearest million dollars.

            Bids for Group A Circles
            AP   GU   KA   MA   TN   DE  
BHARTI    |    |    |    |    |    |    | 
BIRLA     |    |1003|1003|2497|    |3567| 
BPL       |    |    | 878|    |1439|2023| 
ESSAR     | 760| 375| 503|1602| 141|1140| 
HFCL      |4893|4804|    |    |    |4804| 
ISPAT     |    |    |1846|4430|    |1846| 
MODI      |    |    |    |    |    |    | 
RELIANCE  | 435| 903| 435|2040| 635| 535| 
RPG       |    | 796|    | 796|1115|1592| 
SHYAM     | 535|    |    |    |    | 709| 
SPIC      |    |    |    |    | 762|    | 
STERLITE  | 193|    | 163|    | 283|    | 
TATA      | 580|    |1271|3678|    |2006| 
USHA      |    |    |    |    |    |    | 
UT        |1124|    |1254|    |    |    | 
VIDEOCON  |    |    |    |    | 281|    | 


            Bids for Group B Circles
            HA   KE   MP   PU   RA   UE   UW   WB  
BHARTI    | 334|    |    |1170|    |    |    |    |
BIRLA     |    |    |    |    |    |    |    |    |
BPL       |    | 325|    | 624|    |    |    |    |
ESSAR     |  51|    |    | 288|    |    |    |    |
HFCL      |1293|3043|    |2887|    |    |2096|2887|
ISPAT     |    |    |    |1054|    |    | 859|    |
MODI      |1003|    |    |    |    |    |    |    |
RELIANCE  |   4|   7|   9| 220|   4|   4|   4|  33|
RPG       |    |    |    | 159|    |    |    |    |
SHYAM     |    | 401|    | 401| 354|    |    |    |
SPIC      |    |    |    |    |    |    |    |    |
STERLITE  |    |    |    |    |    |    |    |    |
TATA      |    |    |    |    |    |    |    | 435|
USHA      |    |    |    |    |    |    |    |    |
UT        |    |    |    |    |    |    |    | 371|
VIDEOCON  |    |    |    |    |    |    |    |    |

            Bids for Group C Circles
            AN   AS   BI   HP   JK   NE   OR
BHARTI    |    |    |    |    |    |    |    |
BIRLA     |    |    |    |    |    |    |    |
BPL       |    |    |    |    |    |    |    |
ESSAR     |    |    |    |    |    |    |    |
HFCL      |    |    |    |    |    |    | 658|
ISPAT     |    |    |    |    |    |    |    |
MODI      |    |    |    |    |    |    |    |
RELIANCE  | 0.1| 1.4|   4| 0.6|    | 0.6|   3|
RPG       |    |    |    |    |    |    |    |
SHYAM     |    |    |    |    |    |    |    |
SPIC      |    |    |    |    |    |    |    |
STERLITE  |    |    |    |    |    |    |    |
TATA      |    |    |    |    |    |    |    |
USHA      |   1|    |  78|    |    |    |  82|
UT        |    |    |    |    |    |    |    |
VIDEOCON  |    |    |    |    |    |    |    |


          Major partners (for basic services)
RELIANCE  Nynex (USA)
HFCL      Bezeq (Israel), Shinawatra (Thailand)
ESSAR     Bell Atlantic (USA)
ISPAT     Hughes (USA)
RPG       NTT, Itochu (Japan)
TATA      Bell Canada
BPL       US West (USA)
SHYAM     PTT Guangdong (China), Havis
BIRLA     Aditya Birla Group (India), AT&T (USA)
UT        Jasmine
USHA      Moscow Telecom
STERLITE  Telecom Malaysia
BHARTI    Stet
VIDEOCON  Punwire (India), Deutsch Telecom (Germany)
SPIC      Telstra (Australia)
MODI      S K Modi Group (India), Telecom Asia


TELECOM CIRCLES - ABBREVIATIONS USED

Circle names (usually states) have been abbreviated to save space.
Group A - best markets, according to the government
AP - Andhra Pradesh
GU - Gujarat
KA - Karnataka
MA - Maharashtra
TN - Tamil Nadu
DE - Delhi
Group B - medium-sized markets
HA - Haryana
KE - Kerala
MP - Madhya Pradesh
PU - Pubjab
RA - Rajasthan
UE - Uttar Pradesh, eastern half
UW - Uttar Pradesh, western half
WB - West Bengal
Group C - smallest markets
AN - Andaman and Nicobar islands
AS - Assam
BI - Bihar
HP - Himachal Pradesh
JK - Jammu and Kashmir
NE - Northeastern states excluding Assam
OR - Orissa

TECHONOMIST COPYRIGHT NOTICE AND SUBSCRIPTION

(C) Copyright 1995 Deus X Machina, Rishab Aiyer Ghosh. ALL RIGHTS RESERVED.

This article may be redistributed in electronic form only, provided that the article and this notice remain intact. This article may not under any circumstances be redistributed or resold in any non-electronic form, or for compensation of any kind, without prior written permission from Rishab Aiyer Ghosh (rishab@dxm.org)

This article is from the Indian Techonomist (http://dxm.org/techonomist/), the newsletter on India's information industry. Annual subscription (monthly print edition plus e-mail bulletins) is for US$ 595 or equivalent. For information, contact Rishab Ghosh by e-mail at rishab@dxm.org, call +91 11 2454717 or post to A4/204 Ekta Apts, 9 I.P. Extn, New Delhi 110017, INDIA.


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