Pune, Aug 8: Birla AT&T Communications Ltd (BATCL), the cellular service provider for Maharashtra (except Mumbai), Gujarat and Goa will shortly ask for an extension of its licence period. BATCL's licence fee for the quarter falls due on September 12.

BATCL president and CEO Rajan Mathew said the joint venture was delayed by over nine months due to no fault of theirs and they should therefore be allowed to recoup their earnings over a corresponding period. The delays in getting the network going with the necessary clearances had not been anticipated, he pointed out.

The losses incurred over the nine month period, while hard to quantify, would on an average work out to Rs 4 crore a month. This is separate from the hike in tariff which the Department of Telecommunications (DoT) imposed by its directive of Janaury 28, Mathew added.

While one service provider has already asked for a postponement of its licence fee caused by governmental delays, the Telecom Regulatory Authority of India (TRAI) still has to adjudicate on it. Mathew said that this extension would be asked for by cell service providers on an individual basis, as against the industry representative, the COAI, asking for a deferment by two years of the licence fee installment. COAI has asked for a deferment keeping the net worth present value. This would free the cellular operators' capital, a matter which assumes importance given that Indian financial institutions have shown a reluctance to lend to this sector.

BATCL, set up in 1995, as a 51:49 joint venture between the AV Birla group and AT&T Wireless Services, has an annual licence fee of Rs 150 crore per circle. It holds the licence for Maharashtra (except Mumbai) and Gujarat. Goa forms part of the Maharashtra circle. The ten-year licence fee for the two circles is Rs 3,451.80 crore.

BATCL's recent successful effort in raising a non-recourse offshore debt of US $285 million is shortly expected to come up for final clearance from the Reserve Bank of India and the ministry of finance (MoF).

This offshore loan will include several Indian banks in the consortium. Among the Indian banks are SBI, which will arrange for rupee and dollar loans while Dena and Canara Bank will arrange solely rupee loans. Among other bankers are Standard Chartered, who will raise rupee and dollar loans while the Hongkong Bank will make available rupee loan only. While there was no official comment, it is believed that the Industrial Development Bank of India (IDBI) could also join the consortium.

BATCL will raise its working capital needs domestically, Mathew said. He said these would be in the form of lines of credit and would range between Rs 10 to Rs 30 crore.

These LCs would be raised through BATCL's relational banks, the Bank of America, SBI, Dena Bank, Canara Bank and the Deutsche Bank. While BATCL expects to maintain its profitability schedule, which means it breaks even in the fourth year of operations, in 2001, revenue streams have become operational from February 1997, Mathew accepted.

Mathew was hopeful the vexed issue of interconnect would be resolved by the end of September since the government, as a GATT and WTO signatory, has already accepted the positions involved in the interconnect. The DoT cannot therefore hold back. While Mathew did not rule out BATCL getting licences for other areas, he said this was not a priority. It is also pressing for permission to operate as an independent Internet service provider. Mathew said they were seeking permission to connect directly with Videsh Sanchar Nigam Ltd (VSNL) instead of being routed through DoT. The Internet service, for data transmission, would use BATCL's existing infrastructure.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.