Aircel Digilink India Limited

Active

Prospective

Aircel Digilink India Limited (ADIL) was awarded a 10 year cellular service license in March 1995 for three telecom circles: Haryana, Rajasthan, and Uttar Pradesh (East). The company's ownership structure was Swiss Telecom PTT (30%), Essar Group (51%), Cellular Communications International (10%) by end 1998. The government of India divided the country into 24 telecom circles to award cellular licenses in two phases. Phase I entailed the issuance of two licenses in each circle for the cities of Mumbai (formerly Bombay), Delhi, Calcutta and Chennai (formerly Madras). Phase I tenders were issued in 1992. Phase II entailed the issuance of two licenses for each of the remaining 20 circles. Phase II tenders were issued in 1994. For each circle, the state-owned operator Bharat Sanchar Nigam Limited retained the right to enter as the third operator in all areas of India except Delhi and Mumbai. Tender evaluations were reviewed and companies were selected based on two criteria: technical and financial. Of the qualified bids, licenses were awarded to the highest bidders. ADIL had to pay over US$237.4 million in license fees over a period of 10 years for all three circles. The license was later extended to a 15 year term. However, like many other companies, Aircel Digilink faced difficulties in paying its license fees. To reduce the financial burden placed on the telecom operators, a new revenue sharing license fee structure was introduced with the New Telecom Policy in July 1999. This payment structure enabled all telecom license operators to switch to a new 15% revenue sharing policy, provided they complete their payment on accumulating dues by January 31, 2000 and that both operators in the circle agree to switch over to the new system. Prior to shifting to the new system, the company owed US$58.27 million (in 1995 dollars) in license fee obligations. The company launched its services in Haryana in March 1997, in Rajasthan in May 1997, and in Uttar Pradesh (East) in April 1997. ADIL provides cellular services under the brand name "Essar" also known as Essar Cellphone. Siemens, Nokia, and Motorola are the equipment suppliers. In November of 2003, Aircel Digilink completed a merger with Hutchison Essar. With this merger, the three circles of Aircel Digilink became part of the Hutchison Essar group. The Hutch brand was to be extended to these circles. The move was the first step towards the consolidation of the entire Hutch group of companies. http://www.coai.com/ Website request sent 7/17/2003 Emails sent to info@essarcellphone.net, info@essarcellphone.net on 7/17/2003 Fax to Dr. Naresh Malhan, Aircel Digilink India Limited, FAX NO.: 91 11 2638 3187, 7/17/2003 None

Information and communication technology (ICT)

World Bank Group

Project

Warehouse, Telecommunications, Government, Manufacturing (Industrial)