The paging arm, which has the license for 9 states, has an equity base of Rs 170 crore and CDC was to have picked up its stake in the venture at par. This would have translated into an equity infusion of about Rs 58 crore and brought down the parent Punjab Wireless's stake to 60 per cent.

CDC, however, has not yet finalised its option. "We have already put a freeze on our expansion after reaching 150 cities and towns across the country. As of now we are safe even if the funds do not flow in. We are nevertheless open to offering the stake to another party. We see tremendous potential in the business and if the telecom policy changes for the better, we may even offload our stake at a premium," said a Punwire source.

TheIndustrial Finance Corporation of India (IFCI) has a 5 per cent stake in the paging company which, in terms of network, is the largest in the country.

Initially, CDC did not have a stake in the venture which is only in its first year of operations. Subsequently, after the licenses were granted, it decided to pick up 34 per cent. It is learnt that doubts over bringing in revenue sharing rather than fixed licence fee could have led to the foreign development institution taking its time in making up its mind.

Punwire's paging services are run through two separate subsidiaries. One is Punwire Mobile which has licences for Andhra Pradesh, Gujarat, Karnataka, Kerala, Maharashtra, Madhya Pradesh, Rajasthan, Tamil Nadu and Uttar Pradesh.

The other is Punwire Paging Services which has the licenses for Punjab, Haryana and Himachal Pradesh. Here, Punwire holds 51 per cent stake (in an equity base of about Rs 30 crore) while the rest is held by Swedish telecom giant-Telia.

The two firms offer paging servicesunder the brand name-Page Me. Punwire officials said the company has touched the one-lakh subscriber mark, and having reached 150 cities and towns it has decided to tread cautiously.