Shyam ACeS India also plans to raise $13 million from Indian and foreign financial institutions as part of its strategy to achieve financial closure in the next six months. At present, the equity of Shyam ACeS India is $12 million while Lockheed Martin holds $5 million in convertible debentures.

The gateway will be set up near New Delhi and will be operated and maintained by Videsh Sanchar Nigam Ltd. The total project cost is $30 million with Shyam ACeS holding 51 per cent and ACeS International the remaining 49 per cent. Lockheed Martin has a 32 per cent stake in ACeS International. "The contract is valued at more than $17 million. It is spread over 18 months," Stanton Sloane, senior vice-president of networks systems development at Lockheed Martin Global Telecommunications, told a news conference.

Asia Cellular Satellite is a $700-million project promoted by the US-based Lockheed Martin. "The first satellite will be launched by January 2000 and full-fledged commercial services are expected to commence by middle of next year over Asia," Adi R Adiwoso, ACeS chief executive officer said.

The company hopes to offer handsets for less than $1,000 and the tariffs will be less than Rs 45 per minute. Ashutosh Garg, chief marketing officer said, "we are looking at revenues of $30 million in the first 12 months of operations in India."

Shyam ACeS India will now be able to meet the aspirations of the Indian government to expand the existing rural telephony network and meet the enormous unmet demand for affordable telecom services. Rajeev Mehrotra, chairman, Shyam Group, said that the projected cost of the ACeS services will be among the lowest offered by mobile satellite systems in keeping with the needs of the Indian customer.

The system will deliver mobile voice and data communications services via one of the world's most powerful commercial mobile communication satellites. In addition to India, service providers in Bangladesh, Indonesia, Pakistan, Philippines, Sri Lanka and Thailand have also agreed to market the services in their national territories. Shyam ACeS India Pvt Ltd is a joint venture incorporated in March 1998 between ACeS International and Shyam International Pvt Ltd.