Out of vendor financing, Rs 760 crore will be provided by Lucent Technologies Hindustan Ltd (formerly Tata Lucent Technologies Ltd) and the balance Rs 318 crore will come from Hughes Network Systems, which is an associate of Hughes Electronics of USA.

The vendor debt is repayable in nine years from the date of drawal with interest rate yet to be fixed. Company officials said the interest rate would be 200 to 500 basis points above the long-term prime lending rate of institutions.

Of the institutional debt of Rs 854 crore, ICICI will retain Rs 350 crore while the balance is to be syndicated from banks/financial institutions shortly.

The company has already installed its advanced intelligent network platform which will enable it to launch value added services like toll-free service lines and premium call charges/calling card services etc. It has already installed 27,000 lines in Maharashtra and plans to roll out calling card facilities by end of September 2000, according to sources.

Hughes Tele's peak funding requirement is Rs 3,600 crore which is to be met in the form of Rs 1,550 crore equity and Rs 2,050 crore debt. Promoters have already brought in Rs 673 crore towards equity and Hughes intend to put in another Rs 130 crore in the forthcoming IPO of the company.

The company intends to provide basic and value added services to more than 5 million lines over a 20-year period, to both commercial and residential users.