Reliance company withdraws bid for cellular licence

NEW DELHI, JULY 6. The Reliance group today withdrew one set of bids filed by one of its companies for the fourth cellular licence following instructions to this effect from the Department of Telecommunications. This will leave only one Reliance company in the fray. The group had submitted two sets of bids for 15 telecom circles which together accounted for 30 out of a total of 57 bids submitted by all companies. However, its competitors had informally objected, saying the group had violated a clause which prohibited two bids from the same promoter in one circle. Since, both the companies - Reliance Telecom and Reliable Internet - had submitted bids for the same circles, they demanded that both the bids be scratched.

As the contention was too drastic a course, the DoT asked Reliance to retain any one of the two bids. The two companies bid for Chennai, Delhi, Mumbai, Tamil Nadu, Andhra Pradesh, Kerala, Punjab, Maharashtra, Rajasthan, U.P.(West), U.P.(East), Gujarat, Haryana and Karnataka.

The Government is understood to have cited a similar ruling against its own undertakings. In the case of licences for WLL- based basic services, it had asked MTNL and VSNL to withdraw their bids because BSNL, in which the Government had a majority stake, was already active in the segment.

Sources said the bids submitted by Reliance Telecom were withdrawn while the little known Reliable Internet would remain in the fray against the Bharti Group as well as the Tata- Birla- AT & T - BPL combine. Analysts said the most likely reason was that Reliable Internet had equity infusion from Reliance Telecom and Reliance Capital. While the former would help in establishing its credentials as a proven telecom services company, the latter's financial vigour and expertise in the area would enable it to raise funds from India and abroad.

The attempt by all three competitors - Reliable, Bharti and Birla-AT & T et al - would be to win as many licences as possible and thereby establish a pan-Indian presence in the cellular segment. However, some analysts believe that Reliance could be selling a dummy to the two competitors as it already had letters of intent (LoI) for the much cheaper WLL licences for several States.