After a merger attempt that fell through earlier, Tata Teleservices Ltd (TTL), a group company of the Rs 40,000 crore Tata group, is once again on the verge of finalising a deal with Hughes Tele.com, which should be through by the month-end.

Speaking to The Financial Express, the managing director of Tata Teleservices Mr S Ramakrishnan said the two companies were examining the options of outright merger of Hughes Tele.com with TTL or, alternatively, the purchase of shares route, which would make TTL the majority stakeholder in Hughes Tele.com.

The move, Mr Ramakrishnan said, was contemplated to facilitate TTL's entry into the Maharashtra basic phone market. "Not only would the merger with Hughes Tele.com or a majority stake in the company enable us to acquire a subscriber base of 1,60,000-1,70,000 but would also save us the cumbersome task of getting landline work done in a city like Mumbai," he said.

But while the TTL MD is fairly optimistic about the outcome of the current negotiations, the company is taking no chances. "We have already extended the validation period for our Letter of Intent for basic services in Maharashtra till June-end and just in case the Hughes deal falls through once again, we will be in a position to go it alone in Maharashtra.

One thing we're very clear about is that we either reach an agreement with Hughes over the merger or majority stake issue by the end of this month or else we move," he declared. On the issue of alternate funding plans for TTL's ongoing and future projects pending the resolution of the controversial VSNL issue, Mr Ramakrishnan maintained that "since the original funding pattern included provision of equity by the Tata Group which has committed funds for the initial two to three year roll out, we'll adhere to it."

The company was awaiting the outcome of the sub-committee, which had been constituted to look into the matter and expressed hope that the decision would be based on "the facts of the case and the logic of the situation." Meanwhile, TTL has chalked out a Rs 1,000-crore basic services roll-out plan over the next three to five years for Gujarat.

Apart from BSNL, the company has a rival in Reliance which has almost a year's head-start over TTL and is all set to launch its services in the state. 

In keeping with the company's policy of piggy-back riding on the infrastructure created by others "to try and avoid duplication", TTL has worked out a commercial arrangement with Hutchinson's Fascel, the cellular service provider for Gujarat which has already laid an infrastructure backbone in Gujarat.