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Saturday, July 07, 2001



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Reliance withdraws one set of cellular bids

G. Rambabu


RELIANCE Communications Pvt Ltd has withdrawn its set of bids for the fourth cellular licences in 15 circles across the country, which it had submitted to the Department of Telecommunications (DoT) on July 29.

This follows the decision by the DoT not to entertain more than one bid by any group companies for the same circle. Reliance had put in two sets of bids for the fourth cellular licences vide Reliance Communications Pvt Ltd and Reliable Internet Services Ltd.

While Reliance Communications Pvt Ltd is a wholly-owned subsidiary of Reliance Industries Ltd (RIL), Reliable Internet Services Ltd has multiple shareholdings, including Reliance Telecom (30 per cent), RIL (10 per cent) and the remaining by Reliance Capi tal.

The DoT, in a letter to all the seven bidders for the fourth cellular licences, had noted that as per clause 13.3.1 in the tender document, the ``no common interest'' condition meant to ensure fair competition.

According to sources, Reliance was initially reluctant to withdraw one set of bids and even contested the DoT decision saying that the tender document only focused on licensing and does not mention anything about pre-qualification bids by the company.

If the DoT feels it fit to disqualify the bid by one of the two companies, it was free to do so.

However, the DoT had pointed out that in case it allows both the group companies to bid, then it would only lead to more litigations and petitions in courts. Further, it would lead to more delays in awarding licences for the fourth licences. Reliance, th erefore, decided to withdraw its one set of bids, sources said.

The decision to withdraw the bids by Reliance Communications was for strategic reasons. ``Since Reliance Capital has a huge networth, future financing of projects will be no problem. On the other hand, Reliance Telecom already has experience in basic and cellular services. A combination of both should make Reliable Internet Services a stable company to bid for a roll-out of the cellular services that it has bid for'' , they said.

With this, there remain only 42 bids for the fourth cellular licences in the four metros and 17 circles. Reliable Internet Services continues to lead the pack, having expressed in 15 circles, including the lucrative four metros.

Bharti Cellular has also expressed interest in an equally high number of circles -- as many as 11. Escorts Communications Ltd has also placed its pre-qualification bid for eight circles, and Batata -- which has just firmed up a merger deal with BPL -- ha s bid for three circles.

Hutchison-Essar has also bid for four circles, applying under the Essar subsidiary -- Barakhamba Sales & Services Ltd and a relatively unknown company, Indmobile Ltd has applied for just one circle.

The DoT is now scheduled to announce the list of pre-qualified bidders only on July 9, after which the three-stage informed ascending bidding process is to be put into motion. The final list of successful bidders is scheduled to be announced by July 19.

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