Sources said UTI will extend Rs 50 crore by way of subscription to secured redeemable, non-convertible debentures. In addition, the company has got another Rs 50 crore term loan from Dena Bank.

With these approvals amounting to Rs 100 crore, awarded earlier this week, ASC has tied up funds totalling Rs 1,100 crore out of the required Rs 1,250 crore for the Agrani satellite communication service project.

Sources said that ASC was in talks with institutions like SBI, GIC, LIC and IIBI for funding the balance Rs 150 crore. "In-principle sanctions for the remaining part of Rs 150 crore will follow soon and we are quite confident of achieving financial closure by the year-end," said a company official.

Others who have pledged funds to ASC include IFCI, IDBI and ICICI of Rs 300 crore each, while Bank of India (BoI) and Industrial Investment Bank ofIndia (IIBI) have already pledged Rs 50 crore each to the project.

ASC aims to provide high quality and affordable mobile satellite services (MSS) and fixed satellite services (FSS) by the year 2001. It will also provide telecommunication and satellite space-segment capabilities and transponders.

The company hopes to derive maximum synergy from ESSEL Group's other information, entertainment and media businesses. ASC is also positioning itself as a low cost/affordable service using dual mode (terrestrial GSM/satellite) pocket-sized handheld and a variety of other terminals throughout India and neigbouring countries.

Other satellite service providers like Iridium charge Rs 99,000 for handsets with an airtime of Rs 150 per minute, ICO proposes to sell handsets at Rs 30,450 with an airtime charge of Rs 85 per minute, while Globalstar is planning handsets at Rs 43,500 and airtime of Rs 65 a minute. In contrast, Agrani plans to offer handsets at Rs 17,000 with airtime charge of Rs 22 per minute.

ASC plansto deploy a multi-mission geostationary satellite called Agrani, which shall comprise an L-band MSS service mission with Indian sub-continental coverage, with additional coverage of the UAE. In addition, it will also have a Ku-band FSS (fixed satellite service) mission, a Ku-band DTH mission, both covering India and West Asia while a C-band FSS (TV distribution) mission will have Pan-Asian coverage.

The satellite, which is under procurement from Lockheed Martin Corporation of the US, is based on LMC's flight proven A2100 spacecraft bus. The L-band MSS has a capability to serve over a million subscribers and cover India, Nepal, Bhutan, Sri Lanka, Bangladesh and the UAE.

The C-Band TV trunking will have four Pan-Asian transponders for TV distribution to CATV headends. The Ku-band-DTO/DTH will have up to 10 high power transponders for DTH covering India and West Asia and transponders capable of transmitting 60 digital channels to the region.