Fascel

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Fascel was awarded a 10 year cellular service license for the telecom circle of Gujarat. The company was initially owned by Himachal Futuristic Communications Limited (HFCL) (10%); Bezeq of Israel (16%); Shinawatra International Public Company of Thailand (now Infocell Telecom Company) (33%); Indusind Telecom Network (owned by Hinduja Group and Sumitomo Corporation of Japan) (30%); and Kotak Mahindra Finance Limited (KMFL) (11%). The company has since undergone numerous ownership changes. As of December 2004, Fascel's ownership structure is as follows: IndusInd (30%); Kotak Mahindra Group (21%) and Hutchison Telecommunications International Limited (49%). Fascel committed to pay US$502 million in license fees over a period of ten years. The license term was later extended to a 15 year term. However, like many other companies, Fascel 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. In February 2005, Hutchison Group consolidated all its mobile operations in India into its Mumbai subsidiary Hutchison Essar Limited (HEL), formerly called Hutchison Max Telecom Limited (HMTL). As of June 2006, Hutchison Telecommunications International Limited (HTIL), subsidiary of Hong Kong’s Hutchison Whampoa Group, had 67% equity stake in HEL and the balance was held by India’s Essar Group. The company began offering services in Gujarat in 1997 and operates under the brand name CelForce. Investment figures are in Hutchison Max Telecom Limited. In February 2005, Hutchison Group consolidated all its mobile operations in India into its Mumbai subsidiary Hutchison Max Telecom Limited. HMTL became the holding company of Fascel Limited, Hutchison Telecom East Limited, Hutchison Essar Telecom Limited, and Hutchison Essar South Limited. After the consolidation, Hutchison Telecommunications International Limited (subsidiary of Hutchison Whampoa Limited) had 42.34 percent ownership in HMTL. The other shareholders of HMTL were Essar group (26.42 percent), the Kotak Mahindra Group (22.97 percent), the Hinduja Group (5.11 percent) and Max India (3.16 percent). The consolidation was in preparation of an initial public offering of Hutchison’s India operations. HMTL was expected to be renamed Hutchison Essar Limited. Email sent to nina.hgil@hindujagroup.com on 7/18/2003 Email sent to Aditi Ghosh Pandey on 7/22/2003 Corporate Communication Hutchison Fascel According to a June 2002 email sent by the company, the following investment amounts were made by firm: 1996-97 Rs 350 crore (USD100m) 1999 Rs 163 crores (USD38.8m) 2000 Rs 150 crores (USD33.3m) E-mail: aditip@fascel.com None