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Hutchison bids for long-distance call rights

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CIOL Bureau
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NEW DELHI: The Indian mobile unit of Hong Kong's Hutchison Whampoa has sought a licence for national long-distance calls, the government said on Monday, a move which may enable the wireless carrier to broaden its services.

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At the moment Hutchison Essar Ltd., 49.6 percent owned by Hutchison Telecommunications International Ltd., is ranked fourth in terms of mobile users.

The company plans an initial public offering of its stock this year.

Shakeel Ahmad, junior minister for communications, told parliament that Mumbai-based Hutchison Essar was among 18 companies that had applied for licences to offer long-distance domestic and international calls.

Five firms, including Tulip IT Services Ltd., which has a wireless data network across 350 cities, have applied for both permits, the minister said.

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In January, India slashed the entry fees paid by companies wanting to offer national and international calls in a bid to reduce call rates and boost growth in a sector that has lagged behind mobile services.

It cut the fee for national long-distance telecoms services to 25 million rupees from 1 billion and lowered the entry charge for international services to 25 million rupees from 250 million.

State-run Mahanagar Nigam Telephone Nigam Ltd., which has a network providing landline and mobile services in only two cities -- Mumbai and Delhi, is among those seeking licences.

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India enjoys some of the cheapest local call rates, but tariffs on overseas calls and domestic long-distance calls are high, because they are used to offset lower margins on local calls and reflect higher capital costs.

India also cut annual licence charges for both services to 6 percent of annual gross revenue a year from 15 percent, and the government said it expected more players, some of them foreign firms, to enter the booming telecoms market.

At the moment India has four integrated carriers that offer both overseas and domestic long-distance services. They are state-run Bharat Sanchar Nigam Ltd., Reliance Infocomm Ltd., Bharti Tele-Ventures Ltd. and the Tata group.

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