U.S. West decides to pull out of India

U.S. West decides to pull out of India

NEW DELHI (AFP): India's reforms in the telecommunications
sector got a jolt Friday when U.S. West Inc., the first foreign
company to invest in the sector, said it was pulling out of the
country.

"We are closing down our business division in India by middle
of January," a source in the company said. "But our joint venture
commitments for cellular telephony will continue."

U.S. West, along with its joint venture partner BPL Ltd., has
been granted licenses to operate cellular telephone services in
three Indian states of Maharashtra, Tamil Nadu and Kerala.

The multinational company has committed US$147 million to the
joint venture.

The source said the company's "global thrust" had changed
since it took over the U.S.- based Continental Cable Vision six
months ago and it was now "mainly geared to concentrate on U.S.
market."

"The company has decided to concentrate on the U.S. domestic
cable telephone market and it is closing down most of the other
offices around the world," he said.

"As a part of that strategy U.S. West is not looking at
business development opportunities anywhere else."

The source said a telecommunications scandal which rocked
India three months ago played no role in the company's decision
to stop its operations in India.

Former telecommunications minister Sukh Ram, who oversaw the
opening of the telecom market, faces corruption charges after
raids by the Central Bureau of Investigations (CBI).

The CBI during raids at Ram's houses in September recovered
1.3 million dollars in cash but Ram has denied any wrongdoing,
saying the cash was elections funds owned by the Congress (I)
party.

"The telecom scandal and the its effect on the reforms in the
sector have not played a role in us pulling out," he said.

U.S. West Inc. was the first telecommunications company to
initiate a telecommunications project in 1991 in India, long
before the market was fully opened up.

But its plan to link three districts in southern India through
a wireless telephone project was grounded by the Department of
Telecommunications.

The company's bid for operating basic telephones in five
Indian states also received a setback when the government capped
the telephone licenses to three states.

India has said its telecommunications sector needs $40 billion
investment by the end of the century, and has invited overseas
capital with concessions and lucrative offers.

According to government figures, the country of 950 million
people requires 40-to-50 billion telephone lines by the year
2000.

Foreign firms including France's Alcatel-Alsthom, American
Telephone and Telegraph Co., Bell Canada and Nokia Corp. have
entered India since the sector was opened in line with the
sweeping economic reforms of 1991.