BPL Cellular Limited

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BPL Cellular limited (formerly BPL US West Cellular Limited) was awarded a 10 year cellular service license for each of the following 3 circles: Kerala, Maharastra, and Tamil Nadu. The company was owned by BPL Communications (51%) and US West (49%) in 1998. BPL Communications was the holding company for BPL Group’s twin cellular ventures – BPL Mobile and BPL Cellular.In June 1998, the division of US West that had ownership in BPL US West Cellular Limited changed its name to MediaOne Group, Inc. In June 2000, AT&T acquired US West. In December of 2003, AT&T sold its 49% stake in BPL Cellular for Rs 92 crore. As of December 2003, BPL Communications was owned 100% by the BPL Communications. BPL Communications in turn was led by the BPL Group (approximately 60 percent) and a consortium of investors that included AIG (USA), Actis (formerly CDC Capital), TVG (Hong Kong), Asian infrastructure fund, and AIDEC Management Co (Singapore). In January 2006, Hutchison Essar Limited completed the acquisition of BPL Cellular Limited. The company committed to pay US$144 million in license fees for Kerala, US$462.8 million for Maharastra, and US$233.5 million for Tamil Nadu over a 10 year period. The license was later extended to a 15 year term. However, like many other companies, BPL Cellular 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 in 1999 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. Under the new policy, BPL Cellular committed to pay off US$248.6 million in license fees prior to shifting to the new system. In July of 2003, BPL Cellular announced the financial closure of its non-recourse debt financing project valued at Rs 3,248 crore. The project was funded by Rs 1,489 crore of equity from the JV partners and the rest by a long term debt of Rs 1,759 crore. The company had been financed by a lenders consortium, including ICICI Bank, IDBI, IDFC, LIC, ABN Amro and Bank of India. Following this announcement, the company, together with BPL Mobile, began a major project to upgrade its network accross the country. The licenses awarded to BPL Cellular covered five of India's 12 biggest cities. Motorola and Nokia designed, supplied, and built the network for all three circles. The company launched its services in Maharastra in January 1997, in Kerala in February 1997, and in Tamil Nadu in May 1997. None None