NEW DELHI, India-Ailing Indian GSM operator Koshika Telecom has decided to sell majority stakes to pay license fees to the Department of Telecommunications (DoT). The company operates in four contiguous telecom circles-Uttar Pradesh (East), Uttar Pradesh (West), Bihar and Orissa.
Leading the race to capture the Koshika licenses are Hutchison, Tata-Birla-AT&T combine, Bharti Telecom and Escotel. The deal is being structured by investment banker Rabobank.
Koshika expects about $300 million for the two Uttar Pradesh circles and between $50 million and $75 million for the other two circles. To get a better price, Koshia is demerging the four circles into separate companies.
Koshika ran into a financial mess following its dispute with its foreign partner, Piltel of the Philippines, which finally walked out of the deal last year.
In addition, a slow take-up of services led to mounting license fees, which Koshika Telecom needs to clear up to migrate to the country’s revenue-sharing regime.
