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After a broken engagement with Bell Canada, Tata Teleservices is looking for a new partner. The Tata Group is looking for a new partner for its basic telecom service venture in Andhra Pradesh through its company Tata Teleservices.

"We are in talks with various players to finalise the joint venture partner for the project. We are also talking to Bell Canada International. However, no decision has been taken yet," Tata Industries Managing Director Kishore Chaukar has been quoted as saying.

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The move follows a request from Bell Canada, asking Tata Industries to replace the company with another partner.

According to the licence agreement for the telecom project, Bell Canada International and its affiliates are required to hold at least 10 per cent of Tata Teleservices' equity capital for five years from the date the licence was issued.

Tata Industries is now trying to identify a partner to comply with the licence conditions. The Tata Group holds 100 per cent of the equity in Tata Teleservices.

The company may go for an initial public offering soon.

"There is a lot of uncertainty in the telecom sector. The company may go for an initial public offering in future. However, no decision has been taken yet," Chaukar has said.

The Rs 43 billion project is expected to go on stream during the first quarter of 1999. The estimated project cost by September 30, 1999, is pegged at Rs 16.81 billion, including a capital expenditure of Rs 16.81 billion, licence fee of Rs 2.4 billion and operating losses of Rs 4.11 billion.

The financing is expected to be an equal mix of debt and equity.

The debt portion will be worth Rs 8.33 billion and the equity would include Rs 6 billion invested by the Tatas and Rs 2.48 billion from other investors. Up to October 1998, Tata Teleservices had aggregate project commitments of over Rs 7.8 billion.

Of this, it has spent Rs 3.03 billion. The expenditure has been financed out of Rs 1.01 billion equity contribution from the Tata Group, bank loans of Rs 900 million and intercorporate deposits of Rs 1.12 billion.

Tata Teleservices has chosen Tata-Lucent Technologies as technology partner for installing the network. A five-year, $325 million contract for turnkey supply and installation of the network has been signed.

- Compiled from the Indian media

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