Tata Tele, Hughes Merger Off

Tata Teleservices and Hughes Tele.com India will not merge, sources close to Hughes said. But the Tata company will transfer its basic telecom operations in Andhra Pradesh to Hughes. Tata Teleservices will emerge as the new holding company for the Tata group's basic telecom operations, national long-distance telephony and Internet services, after hiving off the Andhra operations, said senior Tata officials. The details of the alliance between the two sides would be finalized within the next fortnight. The Tatas had earlier contemplated merging Tata Teleservices and Hughes Tele.com. Apart from the Andhra circle, Tata Teleservices currently holds the license for four more circles and letter of intents for three more. Hughes operates the Maharashtra circle. Earlier, Hughes and the Tatas were deliberating on whether to bring the new four basic licenses under the merged entity. Financial factors such as stamp duty, income tax and other reasons have prompted the promoters to undertake a review of the entire merger process, said Hughes executives.