Explaining the rationale behind the decision, Mr Nahata added: "We want a partner who adds operating experience to the group's existing strengths." According to industry sources, the company is already in late-stage negotiations with some European companies and South-Asian companies. The bidding process for the fourth cellular operators is scheduled to begin shortly. "Henceforth, we are planning to concentrate on equipment manufacturing and network-building as opportunities emerge in this field with the deregulation of the telecom sector," said Mr Nahata. The HFCL group has been a telecom equipment manufacturer of fibre cables, switched mode power supplies, and terminal equipment. It had, in the earlier round of bidding for cellular circles, bid for Gujarat in a tie-up with Bezeq, through the company Fascel India Limited. However, later it sold off its stake in the venture. Similarly, it had bid for many circles for the basic services too, but did not follow up on it. Presently, it runs basic services in thePunjab circle after buying out Essar. In the current melee for basic service licenses, HFCL has filed for seven applications in the circles of Delhi, Karnataka, Maharashtra, Tamil Nadu, Haryana, Kerala, and UP (West).

HFCL, the flagship company has three main divisions: the wireline division, the wireless division and the international turnkey division. Recently, the company also bagged a contract worth Rs 43.77 crore for supplying Digital Carrier Loop Systems to the Mahanagar Telephone Nigam Limited (MTNL). As per this contract, MTNL will introduce fibre in the subscribers access network for 1,27,000 lines in Delhi and Mumbai. The other bidders for the tender were ITI Limited and Alcatel.