The MoU route was speeded up considering Tata Teleservices was keen on launching its services soon. It may still take some time for the joint-venture agreement's commercial aspects to be worked out, according to senior state government sources. The backbone network, which will be a combination of microwave and fibre- optic cabling, is estimated to cost about Rs 2,000 crore, and is expected to be implemented in three phases over the next three years, the sources said. Though such ventures are commonabroad, it is perhaps the first time in India that such a tie-up is being tried out after the National Telecom Policy of 1994 threw open basic services to the private sector.

In the first phase, expected to cover 1,000 kms, Tata Teleservices proposes to lay a 360-km optical-fibre cable using APSEB's transmission towers between Vijayawada and Hyderabad, apart from using the board's Vijayawada- Visakhapatnam network, which has over 3,000 kms of power lines.

While the company would also be free to utilise APSEB's sub-station premises to set up its switching and other equipments, the joint-venture option is attractive, as it the door open for a distribution system that goes beyond the backbone services later, sources said.

The option also gels with the overall plan of the AP government to have in place a totally wired state by the turn of the century and easy access to public-data networks through public tele-info centres Internet kiosks, which are intended to be set up, according to former Videsh SancharNigam managing director TH Choudary. Choudary is now the information-technology advisor to chief minister N Chandrababu Naidu. Though Tata Teleservices is apparently keen on keeping the entire ownership of the cable network to itself, the state government, particularly Naidu, is said to be keen on the option of keeping it open to other players like ISPs who would like to participate through equity in the venture.