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March 26, 1998

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Hughes licence referred to TRAI

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The issue regarding the transfer of Hughes Ispat's licence for basic telecom in Karnataka has been referred to the Telecom Regulatory Authority of India.

The Department of Telecommunications had cleared Hughes Ispat's plea to transfer its licence to Hughes Ispat Communications Ltd, suggesting the licence be directly issued to HICL since the law ministry had already decided against the proposal saying licences were not transferable. It also suggested that a tripartite agreement be signed between the DoT, Hughes Ispat and
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Hughes licence issue
HICL.

The whole DoT proposal was placed before Communications Minister Mr. Beni Prasad Verma, who sought the Telecom Regulatory Authority of India's recommendation on the matter. But Verma's decision comes when the government has referred the scope of TRAI's powers of recommendation to the Delhi high court.

The DoT had backed the Hughes Ispat proposal since the original promoters of both companies are the same. HICL, according to the equity structure approved by the Foreign Investment Promotion Board, will be held by Hughes Electronics Corporation (10 per cent), First HNS Mauritius, a wholly-owned subsidiary of Hughes, (16.65 per cent), Alltel, US (10 per cent) and Alltel (Mauritius), a subsidiary of Alltel, US, (3.35 per cent), while the Indian equity is held by the Ispat group (60 per cent).

The DoT has opined that since Hughes Electronics and the Ispat group, the original promoters of Hughes Ispat, are also promoters in HICL, the transfer can be approved. The only partner missing in HICL is Alcatel, which holds nine per cent in Hughes Ispat, but DoT did not take consider it important snce Alcatel was not one of the original promoters.

-Compiled from the Indian media

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