Spice Cell, which bagged the licence after stiff international competition, will be the first private sector company to provide cellular services in Nepal. At present, a public sector company of Nepal provides cellular services at Kathmandu and adjoining areas.

Six companies were shortlisted among the bidders and Spice Cell was chosen out of them. The others are Millicorn, Rumeli Telecom, Barbi, BPL Mobile and VSNL-MTNL combine.

Speaking to The Financial Express over telephone, Spice Cell's chief operating officer S Venkatraman, who is now in Kathmandu, said: "Although we bagged the contract only on Wednesday, we expect to start providing services by March 2001." The initial investment will be around Rs 150 crore, which will have both debt and equity component.

About the debt-equity ratio, Mr Venkatraman said: "The ratio will depend upon how much loan we obtain from the financial institutions." The company, which provides cellular services in Calcutta along with Command, is yet to start negotiations with the financial institutions for the Nepalese venture.

The company has tied up with the local Khetan group for the purpose. The Khetan group, which is involved in banking, insurance and the manufacture of beverages, has decided to diversify into the telecom sector.

Spice Cell is yet to finalise the technology tieup. "It would not be a major problem for us," Mr Venkatraman said.

The company expects around 50,000 subscribers in three years and achieves to break even before that.