Bharti's plan to dominate cellular sector may suffer

By Our Special Correspondent

NEW DELHI, AUG. 7. The Government has put a spoke in the Bharti Group's plans to emerge as the country's largest cellular company by rejecting its proposal to settle its dues, which have crossed the Rs. 500- crores mark.

Since a ``no dues certificate'' is essential for companies to obtain fresh cellular and basic phone licences, Bharti, according to officials, had offered to settle the dues by paying Rs. 78 crores in cash, Rs. 219 crores in bank guarantees and Rs. 225 crores in corporate guarantees. To Bharti's chagrin, the Department of Telecom informed that corporate guarantees were unacceptable in transactions with Government organisations.

This means that even if the offer of up-front cash and bank guarantees is accepted, Bharti will remain a debtor to the Government of India to the tune of Rs. 225 crores and therefore remain ineligible to pick up the cellular licences. This will thwart the Bharti group owner, Mr. Sunil Mittal's plans of making it the world's second largest company (in terms of population covered) after China Mobile.

However, Bharti officials denied that such an offer had been made. ``According to our information, this is not our offer. The file is pending with the Government,'' they said.

Official sources claimed that the company was pinning its hopes on three developments - a one-month reprieve granted to Tata Telecom, a stay order from the Delhi High Court which will hear its petition on ``no dues certificate'' on Thursday or a ``revised'' opinion on the issue by the Attorney-General (AG).

Any of these courses is possible. After Bharti's Punjab licence was terminated in August 1999, the then Secretary in the PMO, Mr. N.K. Singh, had written to the DoT asking it to seek advice from the AG whether ``counter-offers'' could be made to companies whose licences were cancelled. Accordingly, the AG told DoT to make an offer to Bharti for restoration of the Punjab licence.

After the company refused to accept the package, the AG was approached again for a supplementary opinion. However, the Law Ministry detected inaccuracies in the opinion and it was referred back to the AG. The opinion is still awaited.

Sources feel DoT is unwilling to take action against the company because of its tremendous command over the system. It would prefer a political decision to be taken by the Communications Minister, Mr. Ram Vilas Paswan, or the Union Cabinet on the basis of the AG's advice. However, since the sector is in the middle of intense corporate rivalry between industrial giants such as Reliance and the Tata-AT&T-Birla-BPL combine, Mr. Paswan will have to exercise a great deal of circumspection before taking a final decision.

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