Document:

<PAGE>
                                                                     Exhibit 4.5

                                LICENCE AGREEMENT
                                       FOR
                         NATIONAL LONG DISTANCE SERVICE

                       LICENCE NUMBER: 10-50/2001-BS-I(3)

                                LICENCE AGREEMENT
                                -----------------

This AGREEMENT is made on the 08th day of February (month) 2002 (year) on behalf
of and between the President of India acting through Shri Ram Krishna (Name),
Director (BS), Department of Telecommunications (DOT), Government of India,
Sanchar Bhavan, 20 Ashoka Road, New Delhi - 110 001 (hereinafter called the
LICENSOR) of the FIRST PARTY

                                       AND

M/S VIDESH SANCHAR NIGAM LIMITED, a company registered under the Companies Act
1956, having its registered office at MG Road, Fort Mumbai - 400 001 acting
through Shri Satish Gopal Ranade, Company Secretary the authorized signatory
        -------------------------------------------
(hereinafter called the LICENSEE which expression shall, unless repugnant to the
context, include its successor in business, administrators, liquidators and
assigns or legal representatives) of the SECOND PARTY.

WHEREAS, by virtue of the provisions of Section 4 of the Indian Telegraph Act
1885, the LICENSOR has privilege to grant Licence and the LICENSEE is desired to
have the LICENCE to install, operate and maintain NATIONAL LONG DISTANCE (NLD)
SERVICE NETWORK, hereinafter called "NLD Service Network", and to provide
NATIONAL LONG DISTANCE SERVICE, hereinafter called `NLD Service' within
territorial boundaries of India.

                                       1
<PAGE>
AND WHEREAS in pursuance to the said desire of the LICENSEE, the LICENSOR has
agreed to grant NATIONAL LONG DISTANCE SERVICE LICENCE to the

LICENSEE to install, operate and maintain NATIONAL LONG DISTANCE (NLD) SERVICE
on the terms and conditions appearing hereinafter.

NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:

1.   In consideration of the payment of Entry fee and due performance of all the
terms and conditions mentioned in SCHEDULE-I annexed hereto, on the part of the
LICENSEE, the LICENSOR does, hereby grant, under section 4 of the Indian
Telegraph Act, 1885, on a non-exclusive basis, this LICENCE to install, operate
and maintain the NLD Service Network and provide NLD Services within the
territorial boundaries of the country.

2.   Subject to clause (1) herein above, the LICENCE hereby granted will remain
valid for 20 (Twenty) years from the Effective Date unless revoked earlier.

3.   The LICENSEE hereby agrees and unequivocally undertakes to fully comply
with all the terms and conditions stipulated in this LICENCE Agreement and
without any deviation or reservation of any kind.

4.   Unless otherwise mentioned or appearing from context, the Guidelines issued
in respect of National Long Distance Service including the application form
attached therewith, shall form part and parcel of this agreement. Provided that
in case of conflict or inconsistency on any issue relating to this LICENCE
Agreement, the terms set out in the body of this agreement with schedule annexed
thereto shall prevail.

                                       2
<PAGE>
5.   Effective Date of the LICENCE shall be the date on which the LICENCE is
signed.

IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed
through their respective authorized representatives on the 08th (day) February
                                                           ----       --------
(month), 2002 (year).

<TABLE>
<S>                                        <C>
Signed, for and on behalf                  Signed on behalf of M/S. VIDESH
of the President of India                  SANCHAR NIGAM LIMITED by Mr. Satish
                                           Gopal Ranade, Company Secretary,
                                           Authorised Signatory authorised in
Signed by Mr. Ravi Krishna, Director,      Accordance with the Resolution
DoT, New Delhi.                            No.         dt. 02.09.1987
Stamped                                       ---------
                                           Passed by the resolution of Board
                                           of Directors.
                                           Signed by Mr. Satish G Ranade,
                                           Company Secretary,
                                           Stamped
</TABLE>

IN PRESENCE OF;

<TABLE>
<S>                <C>
1.
Signature          Sd/-
Name               M.S. Shamsi
Occupation         Section Officer (BS-1)
Address            Room-1119, Sanchar Bhawan
                   20-Ashoka Road
Place              New Delhi - 110 001
</TABLE>

                                       3
<PAGE>
<TABLE>
<S>                <C>
2.
Signature          Sd/-
Name               G. PALANIAPPAN
Occupation         Senior General Manager
Address            Videsh Sanchar Nigam Limited
Place              New Delhi - 110 001.
</TABLE>

                                  SCHEDULE - I
                              TERMS AND CONDITIONS

1.   OWNERSHIP OF THE LICENSEE COMPANY

1.1  The LICENSEE shall ensure that the total foreign equity in the LICENSEE
Company does not, at any time during the entire LICENCE period, exceed 49% of
the total paid up equity. The details of the Indian & Foreign promoters with
their respective equity holdings in the LICENSEE company as disclosed on the
date of signing of the LICENCE AGREEMENT, are as follows:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
S.N    NAME OF THE PROMOTER       INDIAN/    PERCENT OF           NETWORTH
                                  FOREIGN    PAID UP EQUITY
--------------------------------------------------------------------------------
<S>    <C>                        <C>        <C>                  <C>
 1.    Promoters/Central Govt.    Indian          52.97
       including Nominees of
       President of India
--------------------------------------------------------------------------------
 2.    As per Attachment             1
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
</TABLE>

                                       4
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1.2  There shall be no change in the Indian and Foreign promoter(s) or their
equity participation unless permitted by the LICENSOR in the interest of
Service.

1.3  The LICENSEE shall have a minimum paid up equity capital of Rs.250 Crores,
on the date of application.

1.4  The promoters of LICENSEE company shall have a combined net worth of
Rs.2500 crores and the net worth of only those promoters shall be counted who
have at least 10% equity stake in the total equity of the LICENSEE company.

1.5  The LICENSEE may, with prior written consent of the LICENSOR, replace a
promoter(s) by another promoter(s) of equal or more net worth.

2.   SCOPE OF THE LICENCE

2.1  This LICENCE is granted to provide SERVICE as defined in Para 2.2 of this
LICENCE Agreement on a non-exclusive basis and others can also be granted
LICENCE for the same SERVICE.

     Provided always that the LICENSOR, of its own or through a designated
Authority, has a right to operate the SERVICE anywhere in India.

2.2  (a)  The NLD Service means picking up, carriage and delivery of switched
bearer telecommunication service over a long distance network i.e., a network
connecting different Short Distance Charging Areas (SDCAs). However, for the
present LICENCE, the LICENSEE will only pick up, carry and deliver Inter-Circle
traffic which goes outside or across from one circle to another, from and to the
network of Access Providers, excluding purely intra-circle traffic except when
such pick up, carriage and delivery is by way of mutual agreement with Basic
Service Provider in accordance with their respective agreed terms.

(b)  The LICENSEE can also make mutually agreed arrangements with Basic Service
Providers for picking up, carriage and delivery of the traffic from different
legs between Long Distance Charging Center (LDCC) and Short Distance Charging
Centers (SDCCs).

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(c)  In the case of Cellular Mobile Telephone Service provider, the inter-circle
traffic shall be handed/taken over at the Point of Presence (POP) situated in
LDCA at the location of originating/terminating Gateway Mobile Switching Center
(MSC) or Mobile Switching Center in a circle.

(d)  The LICENSEE shall be required to make own suitable arrangements/agreements
for leased lines with the Access Providers for last mile.

NOTE:  The list of different Telecom Circles for the purposes of this LICENCE,
which can be modified from time to time for the reasons of reorganization of
territorial jurisdiction or administrative convenience, is annexed as
Annexure-III.

2.3  It is obligatory upon the LICENSEE to provide the above stated SERVICE of
good standard by establishing a state-of-the-art digital network.

3.   DURATION OF LICENCE
3.1  This LICENCE shall come into force on 08.02.2002 (hereinafter called the
                                           ----------
Effective Date of the LICENCE) and shall be valid for a period of 20 years.

4.   EXTENSION OF LICENCE
4.1  The LICENSOR may extend, if deemed expedient, the period of LICENCE, by
10 years at one time, upon request of the LICENSEE, if made during 19th year of
the LICENCE period.

5.   FEES PAYABLE
5.1  The LICENSEE shall pay one time Entry Fee of Rs.100 crores which shall
be non-refundable, before the signing of the LICENCE. In addition thereto, four
Bank Guarantees (BG) of Rs.100 crores each shall be given, before signing of
the LICENCE, which shall be released on completion of each phase of roll out
i.e. fulfilling the network Roll out obligations by establishing Point of
Presence in Long Distance Charging Areas (LDCAs) as specified in clause 9.2 of
this LICENCE Agreement in the manner described below:-

<TABLE>
<S>     <C>                        <C>
  i.    Completion of phase I      Rs.100 Crores
 ii.    Completion of Phase II     Rs.100 Crores
iii.    Completion of Phase III    Rs.100 Crores
 iv.    Completion of Phase IV     Rs.100 Crores
</TABLE>

     Each phase described above shall be taken as an independent obligation
unconnected with other. Any shortfall below the percentage of network coverage -
Phase I, II, III & IV will result in encashment & forfeiture of the particular
BG relatable to that phase. The decision of the LICENSOR shall be final in this
regard.

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5.2  In addition to the Entry Fee described above, the LICENCE FEE in the form
of Revenue Share @ 10% (cap) plus prescribed contributions from time to time by
the LICENSOR towards the Universal Service Obligation Fund (hereinafter called
USO fund) with a total cap of 15% of the annual Revenue Share is payable.
Provisionally at present rate of USO is 5% of the Revenue for this LICENCE.

5.3  Provided that as part of the compensation package in lieu of likely losses
on account of preponement of de-monopolisation, Government would reimburse a sum
equivalent to Entry Fee and annual revenue share as Licence Fee, net of taxes
for a period of five years with effect from April 2001. In addition, Government
will not insist upon performance bank guarantee of Rs.400/- crores so long as
VSNL retains Public Sector Undertaking (PSU) character.

5.4  Provided further that the fee/royalty shall be separately paid in
addition by the LICENSEE for the use of spectrum and also for possession of
wireless telegraphy equipment as per the details prescribed by Wireless Planning
& Coordination Wing (WPC) which depends upon various factors such as frequency,
hop and link length, area of operation and other related aspects.

6.   SCHEDULE OF PAYMENT OF ANNUAL LICENCE FEE AND OTHER DUES
6.1  For the purposes of the LICENCE Fee at 5.2 above, the Ist year shall end on
31st March following the date of commencement of the LICENCE Agreement and the
LICENCE fee for the First year shall be determined on a pro-rata basis for the
actual duration of the "year". From second year onwards, the year shall be of
twelve English calendar months from 1st of April to the 31st of March for
payment of LICENCE fee.

EXPLANATION: The LICENCE fee for the last quarter of the first year and of the
last year of the LICENCE will be computed with reference to the actual number of
days after excluding the earlier quarters, each being of three months.

6.2  LICENCE fee shall be payable in four quarterly installments during each
financial year. Each Quarterly installment shall be paid in advance within 15
days of the commencement of that quarter. This Fee for each quarter shall be
paid by the LICENSEE on the basis of own assessment of revenue (on accrual
basis) for the current quarter subject to a minimum payment of the actual
revenue of the previous quarter, duly certified with an affidavit by a
representative of the LICENSEE authorized by the Board Resolution. However, the
LICENSEE shall pay the LICENCE fee for the first quarter for the first year of
payment on the basis of the expected revenue from the SERVICE in the first
quarter.

6.3  The quarterly payment shall be made together with a STATEMENT in the
prescribed form given in ANNEXURE-A, showing the computation of

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<PAGE>
revenue and LICENCE fee payable for the previous quarter. The aforesaid
STATEMENT of each year shall be required to be audited by the Auditors
(hereinafter called LICENSEE'S Auditors) of the LICENSEE appointed under Section
224 of the Companies' Act, 1956. The report of the Auditor should be in
prescribed form given in ANNEXURE-B.

6.4  The LICENSEE shall adjust and pay the difference between the advance
payment made and actual amount payable (on accrual basis) of the previous
quarter, along with the advance payment for the current quarter.

6.5  Any delay in payment of LICENCE fee, or any other dues payable under the
LICENCE beyond the stipulated period will attract interest at a rate which will
be 5% above the Prime Lending Rate (PLR) of State Bank of India prevalent on the
day the payment became due. The interest shall be compounded monthly and a part
of the month shall be reckoned as a full month for the purposes of calculation
of interest.

6.6  Final adjustment of the LICENCE fee for the year shall be made on or before
30th June of the following year based on the Gross Revenue Figures duly
certified by the AUDITORS of the LICENSEE in accordance with the provision of
Companies' Act, 1956.

6.7  A reconciliation between the figures appearing in the quarterly statements
with those appearing in annual accounts shall be submitted along with a copy of
the published annual accounts and audit report, within 7 (seven) days of the
date of signing of the audit report. The annual financial account and the
statement as prescribed in condition no. 6.3 shall be prepared following the
norms as prescribed in ANNEXURE-C.

6.8  In case, the total amount paid on the self assessment of the LICENSEE as
quarterly LICENCE Fee for the 4 (four) quarters of the financial year, falls
short by more than 10% of the payable LICENCE fee, it shall attract a penalty of
150% of the entire amount of short payment. This amount of short payment along
with the penalty shall be payable within 15 days of the date of signing the
audit report on the annual accounts, failing which interest shall be further
charged per terms of Condition 6.5. However, if such short payment is made good
within 60 days from the last day of the financial year, no penalty shall be
levied.

6.9  The Fee/royalty described at 5.3 above shall be payable at such time(s) and
in such manner as the WPC Cell of the Ministry of Communications may prescribe
from time to time.

6.10 All sums becoming due and payable as mentioned in this LICENCE Agreement
shall be paid by the LICENSEE through a demand draft or Pay Order payable at New
Delhi, drawn on any Scheduled Bank, in favour of the Pay & Accounts Officer
(HQ), DOT or any other Authority if so designated by LICENSOR.

                                       8
<PAGE>
6.11 The LICENSOR, to ensure proper and correct verification of revenue share
paid, can, if deemed necessary, modify, alter, substitute and amend whatever
stated in conditions No. 6.3, 6.7, 8.5 and 8.6 of the Schedule I hereinbefore
and hereinafter written.

7.   FINANCIAL CONDITIONS

     FINANCIAL BANK GUARANTEE

7.1  The LICENSEE shall submit a Financial Bank Guarantee (FBG), valid for one
year, from any scheduled bank in India or from any Indian Public Financial
Institution (IPFI), which is authorised by the appropriate authority to issue
the FBG, in the prescribed Performa annexed. The amount of FBG shall be
equivalent to the estimated sum payable annually towards the LICENCE fee and
other dues not otherwise securitised. The amount of FBG shall be subject to
periodic review by the LICENSOR. Initially, the financial bank guarantee shall
be for an amount of Rs.20 crores (Rupees Twenty crores) which shall be
submitted on or before one year after the date of signing the LICENCE agreement
or prior to the commencement of service whichever is earlier. The service shall
not be permitted to be commenced unless the FBG is subject.

7.2  The fees and royalties for the use of spectrum and also for possession
of Wireless Telegraphy equipment shall be separately securitised by furnishing
FBG in the Performa annexed of equal amount valid for a period of one year
renewable from time to time till final clearance of all such dues.

7.3  The LICENSEE, on its own, shall extend the validity period of the Financial
Bank Guarantee for similar terms at least one month prior to date of its expiry
without any demand or notice from the LICENSOR on year to year basis. Any
failure to do so, shall amount to violation of the terms of the LICENCE and
entitle the LICENSOR to encash the Financial Bank Guarantee and to convert into
a cash security without any reference to the LICENSEE at his risk and cost. No
interest or compensation whatsoever shall be payable by the LICENSOR on such
encashment.

7.4  Without prejudice to its rights of any other remedy, LICENSOR may encash
FBG in case of any breach in terms & conditions of the LICENCE by the LICENSEE.

7.5  Provided that since the LICENCSOR has agreed as per the provisions of
clause 5.3 above to reimburse revenue share as licence fee payable by LICENSEE
net of taxes for a period of five years with effect from April 2001, the
LICENSEE shall be exempted from the obligations of submitting FBG till April,
2006.

                                       9
<PAGE>
8.   PREPARATION OF ACCOUNTS

8.1  The LICENSEE will draw, keep and furnish independent accounts for the
SERVICE and shall fully comply orders, directions or regulations as may be
issued from time to time by the LICENSOR or TRAI as the case may be.

8.2  The LICENSEE shall be obliged to:

a) Compile and maintain accounting records, sufficient to show and explain its
transactions in respect of each completed quarter of the LICENCE period or of
such lesser periods as the LICENSOR may specify, fairly presenting the costs
(including capital costs), revenue and financial position of the LICENSEE's
business under the LICENCE including a reasonable assessment of the assets
employed in and the liabilities attributable to LICENSEE's business, as well as,
for the quantification of Revenue or any other purpose.

b) Procure in respect of each of those accounting statements prepared in respect
of a completed financial year, a report by the LICENSEE's Auditor in the format
prescribed by the LICENSOR, stating inter-alia whether in his opinion that
statement is adequate for the purpose of this condition and thereafter deliver
to the LICENSOR a copy of each of the accounting statements not later than two
months after the end of the period to which they relate.

c) Send to the LICENSOR a certified statement sworn on an affidavit, by
authorized representative of the company, containing full account of Revenue
earned from the SERVICE for each quarter separately along with the payment for
the following quarter.

8.3  (a)  The LICENSOR or the TRAI, as the case may be, shall have a right to
call for and the LICENSEE shall be obliged to supply and provide for examination
any books of accounts that the LICENSEE may maintain in respect of the business
carried on to provide the service(s) under this LICENCE at any time without
recording any reasons thereof.

(b)  The LICENSEE shall invariably preserve all billing and all other accounting
records (electronic as well as hard copy) for a period of three years from the
date of publishing of duly audited & approved Accounts of the company and any
dereliction thereof shall be treated as a material breach independent of any
other breach, sufficient to give a cause for cancellation of the LICENCE.

8.4  The records of the LICENSEE will be subject to such scrutiny as may be
prescribed by the LICENSOR so as to facilitate independent verification of the
amount due to the LICENSOR as its share of the revenue.

                                       10
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8.5  The LICENSOR may, on forming an opinion that the statements or accounts
submitted are inaccurate or misleading, order Audit of the accounts of the
LICENSEE by appointing auditor at the cost of the LICENSEE and such auditor(s)
shall have the same powers which the statutory auditors of the company enjoy
under Section 227 of the Companies Act, 1956. The remuneration of the Auditors,
as fixed by the LICENSOR, shall be borne by the LICENSEE.

8.6  The LICENSOR may also get conducted a "Special Audit" of the LICENSEE
company's accounts/records by "Special Auditors", the payment for which at a
rate as fixed by the LICENSOR, shall be borne by the LICENSEE company. This will
be in the nature of auditing the audit described in para 8.5 above. The Special
Auditors shall also be provided the same facility and have the same powers as of
the companies auditors as envisaged in the Companies Act, 1956.

8.7  The LICENSEE shall be liable to prepare and furnish the company's annual
financial accounts according to the accounting principles prescribed
(Annexure-C) and the directions given by the LICENSOR or the TRAI, as the case
may be, from time to time.

9.   DELIVERY OF SERVICE

9.1  The LICENSEE shall intimate the LICENSOR of commencement of SERVICE within
15 days of such commencement.

9.2  The LICENSEE undertake to fulfil the following minimum network roll out
obligations:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
                                   Cumulative percentage
                    Time           of National Coverage
                    Period         at the LDCA level         Cumulative percentage
                    (From the      where point of            of Coverage of
                    Effective      Presence has to be        uneconomic and
Phase               Date)          established               remote areas
------------------------------------------------------------------------------------
<S>                 <C>            <C>                       <C>
I                   2 Years        15                        2
------------------------------------------------------------------------------------
II                  3 Years        40                        4
------------------------------------------------------------------------------------
III                 4 Years        80                        7
------------------------------------------------------------------------------------
IV                  7 Years        100                       All
------------------------------------------------------------------------------------
</TABLE>

     The details of Long Distance Charging Areas (LDCAs) to be covered in each
phase including the list of uneconomic and remote areas in the network roll-out
of the LICENSEE are given in Annexure-II (to be provided by the LICENSEE)
whereas the list of LDCAs is annexed at Annexure-IV and the list of remote and
uneconomic areas is also annexed at Annexure-V.

NOTE: Provided always that LICENSOR may modify the list of LDCAs on the basis of
reorganization/bifurcations of States/LDCAs/Districts etc.

                                       11
<PAGE>
10.  REQUIREMENT TO FURNISH INFORMATION TO THE LICENSOR AND TRAI

10.1 The LICENSEE shall be obliged to furnish all information to the LICENSOR as
may be called upon from time to time. The LICENSEE shall also submit information
to TRAI as per any order or direction or regulation issued from time to time
under the provisions of TRAI Act, 1997 or any amended or any modified statute.

10.2 The LICENSEE shall disclose complete details of terms and conditions, and
obligations under all contracts entered into with Infrastructure Providers and
other LICENCED Service Providers on sharing of infrastructure/backbone for the
provision of SERVICE, or any change thereof, within 15 days of entering into
such contracts etc. and shall also provide the authenticated copies of all such
contracts within such period.

10.3 The LICENSEE shall, in no case, permit connectivity or similar type of
service to any other person or erstwhile LICENSEE (including those Other Service
Providers who do not require LICENCE under section 4 of the Indian Telegraph
Act, 1885) whose LICENCE is either terminated or suspended or not in operation
at given point of time. In the event of any connectivity allowed beforehand,
then the LICENSEE shall be obliged to disconnect or sever connectivity
immediately without loss of time and further, upon receipt of any reference from
the LICENSOR in this regard, disconnection shall be made effective within an
hour of receipt of such reference. The LICENSEE shall keep the LICENSOR
indemnified from any claim of such Telecom Service Provider or third party. On
the question of disconnectivity the decision of the LICENSOR shall be final.

11.  RESTRICTIONS ON TRANSFER OF LICENCE

11.1 The LICENSEE shall not, without the prior written consent as described
below, of the LICENSOR, either directly or indirectly, assign or transfer this
LICENCE in any manner whatsoever to a third party or enter into any agreement
for sub-LICENCE and/or partnership relating to any subject matter of the LICENCE
to any third party either in whole or in part i.e. no sub-leasing/partnership/
third party interest shall be created. Provided that the LICENSEE can always
employ or appoint agents and employees.

11.2 The written consent permitting transfer or assignment of the LICENCE may be
granted by the LICENSOR in accordance with the terms and conditions, and
procedures described in Tripartite Agreement if duly executed amongst LICENSOR,
LICENSEE and LENDERS.

12.  MODIFICATIONS IN THE TERMS AND CONDITIONS OF LICENCE

12.1 The LICENSOR reserves the right to modify at any time the terms and
conditions of the LICENCE, if in the opinion of the LICENSOR it is necessary

                                       12
<PAGE>
or expedient to do so in public interest or in the interest of the security of
the State or for the proper conduct of SERVICE. The decision of the LICENSOR
shall be final in this regard.

13.  SUSPENSION, REVOCATION OR TERMINATION OF LICENCE

13.1 The LICENSOR reserves the right to suspend the operation of this LICENCE in
whole or in part, at any time, if, in the opinion of the LICENSOR, it is
necessary or expedient to do so in public interest or in the interest of the
security of the State or for the proper conduct of SERVICE. LICENCE Fee payable
under condition No. 5.2 to the LICENSOR will not be required to be paid for the
period for which the operation of this LICENCE is suspended in whole.

     Provided that the LICENSOR shall not be responsible for any damage or loss
caused or arisen out of aforesaid action. Provided further that the suspension
of the LICENCE will not be a cause or ground for extension of the period of the
LICENCE.

13.2 The LICENSOR may, without prejudice to any other remedy available to it for
the breach of any conditions of LICENCE, by a written notice of 30 days issued
to the LICENSEE at its registered office, terminate this LICENCE under any of
the following circumstances:

If the LICENSEE:

     a) fails to commission or deliver the SERVICE within the time period(s)
     specified in the LICENCE.

     b) fails to perform any obligation(s) under the LICENCE including
     remittance of timely payments of fee and other dues due to the LICENSOR;

     c) fails to rectify, within the time prescribed, any defect as may be
     pointed out to the LICENSEE by the LICENSOR.

     d) goes in liquidation or ordered to be wound up.

     e) is recommended by TRAI for termination of LICENCE for non compliance of
     the terms and conditions of the LICENCE.

13.3 The LICENSEE may surrender the LICENCE by giving notice of at least 60 days
in advance. In that case the LICENSEE shall also notify all its subscribers of
consequential withdrawal of SERVICE by sending a 30 days notice to each of them.
The LICENSEE shall pay all fees payable by it till the date on which the
surrender of the LICENCE becomes effective.

13.4 It shall be the responsibility of the LICENSEE to maintain the Quality Of
Service even during the period when notice for surrender of LICENCE is pending
and if the Quality of Service is not maintained during the notice period, it
shall be treated as material breach of liable for termination.

                                       13
<PAGE>
13.5 The LICENSOR reserves the right to revoke the LICENCE at any time in the
interest of public by giving a notice of 60 days from the receipt of such
notice.

13.6 The LICENSOR reserves the right to take over the entire services,
equipments and networks of the LICENSEE or revoke/terminate/suspend the LICENCE
in the interest of public or national security or in the event of national
emergency/war or low intensity conflict or similar type of situations. Further
the LICENSOR reserves the right to keep any area out of the operation zone of
the SERVICE if implications of security so require.

14.  ACTIONS PURSUANT TO TERMINATION OF LICENCE

14.1 If under the LICENCE Agreement, an event occurs which entitle the LICENSOR
to terminate the LICENCE Agreement, the LICENSOR shall proceed in accordance
with the terms and conditions provided in the Tripartite Agreement wherever such
agreement is executed and signed. In cases where no such agreement is signed the
action will be taken as per the clauses given below.

14.2 Whenever the LICENCE is terminated or not extended, the LICENSOR may, in
order to ensure the continuity of SERVICE, issue LICENCE to another Indian
Company for running the SERVICE. In such a circumstance, the LICENSOR may issue
LICENCE to a new company who has entered into an agreement with the outgoing
LICENSEE for taking over the latter's network and assets on the mutual agreed
terms amongst them. However, this shall not be interpreted to fasten any
liability of payment or otherwise on the LICENSOR.

14.3 The issuance of aforesaid LICENCE shall be taken as a re-issuance of old
LICENCE on the old/already settled terms and conditions for the un-expired
period.

14.4 On termination or surrender or expiry of the LICENCE The Financial Bank
Guarantees shall be released to the LICENSEE only after ensuring clearance of
all dues which the LICENSEE is liable to pay. In case of failure of the LICENSEE
to pay the amounts due to the LICENSOR, the outstanding amounts shall be
realised through encashment of the Financial Bank Guarantee(s), without
prejudice to any other action(s) for recovery of the amounts due to the
LICENSOR.

15.  OBLIGATIONS IMPOSED ON THE LICENSEE

15.1 The provisions of the Indian Telegraph Act 1885, the Indian Wireless
Telegraphy Act 1933, and the Telecom Regulatory Authority of India Act, 1997 as
modified from time to time or any other statute on their replacement shall
govern this LICENCE.

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<PAGE>
15.2 The LICENSEE shall furnish all necessary facilities as required for the
application of provisions of Section 5(2) of the Indian Telegraph Act, 1885,
whenever occasion so demands. Nothing provided and contained anywhere in this
LICENCE Agreement shall be deemed to affect adversely anything provided or laid
under the provisions of Indian Telegraphs Act, 1885 or any other law in force.

16.  NETWORK STANDARDS

16.1 The LICENSEE will ensure adherence to the National Fundamental Plan
(Fundamental Plan) and technical standards as prescribed, from time to time, by
the Department of Telecommunications in this respect.

16.2 In case of new technologies, where no standards have been determined, the
LICENSEE will seek the approval of the LICENSOR before deploying them and in
such cases the standards specified by Telecom Engineering Center (TEC)/
International Telecom Union (ITU) or such technologies, successful in use
internationally for at least one year for ONE lakh subscribers, shall be
preferred for adoption as approved technology.

16.3 Interconnection between the networks of different service providers shall
be as per national standards of CCS No. 7 issued from time to time by Telecom
Engineering Center (TEC).

16.4 The requisite monitoring facilities shall be provided by the LICENSEE as
and when required by the LICENSOR.

17.  NETWORK INTERCONNECTION

17.1 It shall be mandatory for Basic Service Providers, Cellular Mobile Service
Providers, Cable Service Providers, to provide interconnection to NLD service
providers whereby the subscribers could have a free choice to make inter-circle/
international long distance calls through NLD service provider.

17.2 NLD Service provider shall be required to make own suitable arrangements/
agreements for leased lines with the Access Providers for last mile.

17.3 The LICENSEE may enter into suitable arrangements with other service
providers to negotiate Interconnection Agreements whereby the interconnected
networks will provide the following:

     a)   To connect, and keep connected, to their Applicable Systems,

     b)   To establish and maintain such one or more Points of Interconnect as
          are reasonably required and are of sufficient capacity and of
          sufficient numbers to enable transmission and reception of the
          messages by means of the Applicable Systems,

                                       15
<PAGE>
     c)   To meet all reasonable demand for the transmission and reception of
          messages between the interconnected systems.

17.4 The terms and conditions of interconnection including standard interfaces,
points of interconnection and technical aspects will be such as mutually agreed
between the service providers.

17.5 The LICENSEE shall for the purpose of providing the SERVICE install own
equipment so as to be compatible with other service/Access providers' equipment
to which the LICENSEE's Applicable Systems are intended for interconnection.

17.6 The LICENSEE shall comply with any order or direction or regulation on
interconnection issued by the TRAI under TRAI Act, 1997.

17.7 The LICENSEE shall operate and maintain the LICENCED Network conforming to
Quality of Service standards to be mutually agreed between the service providers
in respect of Network-Network Interface.

17.8 The charges for access or interconnection with other networks for
origination, termination and carriage of calls shall be based on mutual
agreements between the service providers subject to the restrictions issued from
time to time by TRAI under TRAI Act, 1997.

17.9 The network resources including the cost of upgrading/modifying
interconnecting networks to meet the service requirements of SERVICE will be
provided by the service provider seeking interconnection. However, mutually
negotiated sharing arrangements for cost of upgrading/modifying interconnecting
networks between the service providers shall be permitted.

18.  TARIFFS

18.1 The LICENSEE will charge the tariffs for SERVICE as per the TRAI Tariff
orders/regulations/directions issued in this regard from time to time. The
LICENSEE shall also fulfill requirements regarding publication of tariffs,
notifications and provision of information as directed by TRAI through its
orders/regulations/directions issued from time to time as per the provisions of
TRAI Act, 1997 as amended from time to time.

19.  CUSTOMER SERVICE

19.1 The LICENSEE shall provide the service to any individual or legal person,
without any discrimination, unless otherwise directed by the LICENSOR or TRAI as
the case may be.

19.2 Subject to condition 19.1, the LICENSEE shall ensure continuity of SERVICE
to its customers.

                                       16
<PAGE>
19.3 The LICENSEE's contractual obligations to the subscribers will include
terms and conditions under which the services may be obtained, utilised and
terminated. The LICENSEE shall notify in writing all the arrangements with
respect to repair, fault rectification, compensation or refunds.

19.4 Any dispute, with regard to the provision of SERVICE shall be a matter only
between the aggrieved party and the LICENSEE, who shall duly notify this to all
before providing the SERVICE. And, in no case, the LICENSOR shall have any
liability or responsibility in the matter towards the aggrieved party.

20.  BILLING

20.1 The LICENSEE shall offer either itself directly or through access
providers itemised billing services to its customer. In every case the LICENSEE
shall be responsible to its customers and shall ensure fulfillment of the
obligations in this regard. The LICENSEE shall also maintain necessary records
for the billing cycle as specified by the LICENSOR or TRAI from time to time.

20.2 The LICENSEE will provide itemised billing to its customer without
demanding any extra charge either directly or through Access Provider. A billing
handling charge as mutually agreed with NLD Service provider may be payable to
Access Provider, coinciding with the billing schedule of Access Providers.

20.3 All complaints of customers in this regard will be addressed/handled as
per the guidelines, orders or regulations or directives issued by the LICENSOR
or TRAI from time to time.

21.  CONFIDENTIALITY OF CUSTOMER INFORMATION

21.1 Any encryption equipment connected to the LICENSEE's network for specific
requirements has to have prior evaluation and approval of the LICENSOR or
officer specially designated for the purpose. However, the LICENSEE shall have
the responsibility to ensure protection of privacy of communication and to
ensure that unauthorised interception of message does not take place.

21.2 Subject to the conditions contained in these terms and conditions, the
LICENSEE shall take all necessary steps to safeguard the privacy and
confidentiality of any information about a third party and its business to whom
it provides the SERVICE and from whom it has acquired such information by virtue
of those SERVICE and shall use its best endeavors to secure that:

     a) No person acting on behalf of the LICENSEE or the LICENSEE divulges or
     uses any such information except as may be necessary in the course of
     providing such SERVICE to the Third Party; and

                                       17
<PAGE>
     b) No such person seeks such information other than is necessary for the
     purpose of providing SERVICE to the Third Party.

PROVIDED THE ABOVE PARA SHALL NOT APPLY WHERE:
----------------------------------------------

     a) The information relates to a specific party and that party has consented
     in writing to such information being divulged or used, and such information
     is divulged or used in accordance with the terms of that consent; or

     b) The information is already open to the public and otherwise known.

21.3 The LICENSEE shall take necessary steps to ensure that the LICENSEE and any
person(s) acting on its behalf observe confidentiality of customer information.

21.4 The LICENSEE shall, prior to commencement of SERVICE, confirm in writing to
the LICENSOR that the LICENSEE has taken all necessary steps to ensure that it
and its employees shall observe confidentiality of customer information.

22.  QUALITY OF SERVICE

22.1 The LICENSEE shall ensure the Quality of Service (QOS) as prescribed by the
LICENSOR or TRAI. The LICENSEE shall adhere to such QOS standards and provide
timely information as required therein.

22.2 The LICENSOR or TRAI may carry out performance tests and also evaluate the
QOS parameters in LICENSEE's network at any time during the tenure of the
LICENCE. The LICENSEE shall provide ingress and other support including
instruments, equipment etc. for such tests.

22.3 The LICENSEE shall enforce and ensure QOS, as prescribed by the LICENSOR,
from the Infrastructure Provider(s) with whom it may enter into agreement/
contract for leasing/hiring/buying or any such instrument for provision of
infrastructure or provision of bandwidth and/or switch capacity.

23.  SECURITY CONDITIONS

23.1 The LICENSEE shall provide necessary facilities depending upon the specific
situation at the relevant time to the Government to counteract espionage,
subversive act, sabotage or any other unlawful activity.

23.2 The LICENSEE shall make available on demand to the agencies authorized
by the LICENSOR, full access to the switching centers,

                                       18
<PAGE>
transmission centers, routes etc. for technical scrutiny and for inspection
which can be visual inspection or an operational inspection.

23.3 All foreign personnel likely to be deployed by the LICENSEE for
installation, operation and maintenance of the LICENSEE's network shall be
security cleared by the Government of India prior to their deployment. The
security clearance will be obtained from the Ministry of Home Affairs,
Government of India, who will follow standard drill in the matter.

23.4 The LICENSEE shall ensure protection of privacy of communication and
ensure that unauthorized interception of messages does not take place.

23.5 The LICENSOR shall have the right to take over the SERVICE, equipment and
networks of the LICENSEE or revoke/terminate/suspend the LICENCE either in part
or in whole of the Service area as per directions if any, issued in the public
interest, or in case of emergency or war or low intensity conflict or any other
eventuality. Provided any specific orders or direction from the Government
issued under such conditions shall be applicable to the LICENSEE and shall be
strictly complied with.

     Further, the LICENSOR reserves the right to direct the LICENSEE to keep any
area out of the operation for the SERVICE if implications of security so require
and the LICENSEE shall abide by such directions without slightest deviation.

23.6 LICENSOR reserves the right to modify these conditions or incorporate new
conditions considered necessary in the interest of national security and public
interest.

23.7 LICENSEE will ensure that the Telecommunication installation carried out by
it should not become a safety hazard and is not in contravention of any statute,
rule or regulation and public policy.

24.  PROHIBITION OF CERTAIN ACTIVITIES BY THE LICENSEE

24.1 The LICENSEE shall not engage on the strength of this LICENCE in the
provision of any other Service, other than SERVICE as defined in this LICENCE
Agreement.

24.2 To remove any doubt, it is, hereby, clarified that nothing contained in
condition in Para 24.1 above shall preclude the LICENSEE from engaging in
advertising and promotional activities relating to any of the Applicable
Systems.

24.3 The LICENSEE shall take measures that prevent the objectionable, obscene,
unauthorised or any other content, messages or communications infringing
copyright, intellectual property etc., in any form, from being carried on his
network, consistent with the established laws of the country. Once specific
instances of such infringement are reported to the LICENSEE by the

                                       19
<PAGE>
enforcement agencies, the LICENSEE shall ensure that the carriage of such
material on his network is prevented immediately.

24.4 The LICENSEE is obliged to provide, without any delay, tracing facility to
trace nuisance, obnoxious or malicious calls, messages or communications
transported through its equipment and network. Any damages arising out of
default on the part of LICENSEE in this regard shall be payable by the LICENSEE.

24.5 In case any confidential information is divulged to the LICENSEE for proper
implementation of the Agreement, it shall be binding on the LICENSEE and its
employees and servants to maintain its secrecy and confidentiality.

25.  INTERCONNECTION TESTS

25.1 The Interconnection Tests for each and every interface with the other
Service Providers may be carried out by mutual arrangement between the LICENSEE
and the other party involved. The Interconnection Tests schedule shall be
mutually agreed. Adequate time, not less than 30 days, will be given by the
LICENSEE for these tests.

25.2 SERVICE will be commissioned after obtaining clearance from LICENSOR after
successful completion of interconnection tests as mentioned in para 25.1 above.

26.  RIGHT TO INSPECT

26.1 The LICENSOR or its authorised representative shall have right to inspect
the sites used for extending the SERVICE and in particular but not limited to,
have the right to have access to leased lines, junctions, terminating
interfaces, hardware/software, memories of semiconductor, magnetic and optical
varieties, wired or wireless options, distribution frames, and conduct the
performance test including to enter into dialogue with the system through
Input/output devices or terminals. The LICENSEE will provide the necessary
facilities for continuous monitoring of the system, as required by the LICENSOR
or its authorised representative(s). The inspection will ordinarily be carried
out after reasonable notice except in circumstances where giving such a notice
will defeat the very purpose of the inspection.

26.2 Wherever considered appropriate LICENSOR may conduct any inquiry either
suo-moto or on complaint to determine whether there has been any breach in
compliance of terms and conditions of the LICENCE by the LICENSEE and upon such
inquiry the LICENSEE shall extend all reasonable facilities without any
hinderence.

27.  LOCATION OF SWITCHES, TRANSMISSION CENTRE

                                       20
<PAGE>
27.1 The LICENSEE shall provide to the LICENSOR location details of switching
centres, transmission centres, including routing details etc., and location of
these centres shall not be changed without prior intimation to the LICENSOR.

28.  REQUIREMENT TO FURNISH INFORMATION

28.1 The LICENSEE shall furnish to the LICENSOR as well as to the TRAI in the
manner and as per the time frames that these Authorities may demand, such
documents, accounts, estimates, returns, reports or other information in
accordance with the rules/orders as may be specified from time to time.

28.2 ENGINEERING DETAILS:
     --------------------

     (a) LICENSEE shall furnish to the LICENSOR, in such manner and at such
     times as the LICENSOR may require, complete technical details with all
     calculations for engineering, planning and dimensioning of the
     system/network, concerned relevant literature, drawings, installation
     materials regarding the applicable system.

     (b) List of performance tests conducted shall be furnished by the LICENSEE
     one month prior to the date of commissioning of SERVICE. The report shall
     indicate clearly the parameters, if any, not meeting the performance
     standard and affect thereof.

     (c) LICENSEE shall supply all tools, test instruments and other accessories
     to the testing party of LICENSOR for conducting tests.

29.  DISPUTE SETTLEMEMT

29.1 As per provisions of Telecom Regulatory Authority of India Act, 1997, as
amended from time to time, the dispute between the LICENSEE and the other
Telecom Service Providers or the LICENSOR shall be settled in Telecom Dispute
Settlement and Appellate Tribunal.

30.  MISCELLANEOUS CONDITIONS

(a)  INTERPRETATION OF TERMS/DEFINITIONS

30.1 Unless the context otherwise requires, the different terms and expression
used in this LICENCE Agreement shall have the meaning assigned to them as
explained in Annex-I to this LICENCE Agreement.

(b)  FORCE-MAJEURE

30.2 If at any time, during the continuance of this LICENCE, the performance in
whole or in part, by either party, of any obligation under this LICENCE is
prevented or delayed, by reason of war, or hostility, acts of the

                                       21
<PAGE>
public enemy, civic commotion, sabotage, Act of State or direction from
Statutory Authority, explosion, epidemic, quarantine restriction, strikes and
lockouts (as are not limited to the establishments and facilities of the
LICENSEE), fire, flood, natural calamities or any act of GOD (hereinafter
referred to as EVENT) provided notice of happenings of any such EVENT is given
by the affected party to the other, within 21 days from the date of occurrence
thereof neither party shall ,by reason of such EVENT be entitled to terminate
the LICENCE nor shall either party have any such claims for damages against the
other, in respect of such non-performance or delay in performance. Provided
SERVICE under the LICENCE shall be resumed as soon as practicable, after such
EVENT comes to an end or ceases to exist. The decision of the LICENSOR as to
whether the SERVICE may be so resumed (and the time frame within which the
SERVICE may be resumed) or not, shall be final and conclusive. However, the
Force Majeure events noted above will not in any way cause extension in the
period of the LICENCE. While it will normally not be a ground for non-payment of
LICENCE fee, the liability for payment of LICENCE fee for such inoperative
period(s) due to Force Majeure clause may, however, be reduced/waived by the
LICENSOR, at its discretion based on circumstances of the EVENT.

SET OFF CLAUSE
30.3 In the event any sum of money or claim becomes recoverable from or payable
by LICENSEE to the LICENSOR either against this LICENCE Agreement or otherwise
in any manner such money or claim can be (without restricting any right of set
off for counter claim given or employed by law) deducted or adjusted against any
amount or sum of money than due which at any time thereafter may become due to
the LICENSEE under this LICENCE Agreement or any other agreement or contract
between the LICENSOR and the LICENSEE.

30.4 The aforesaid sum of money payable to the LICENSEE Company shall include
any valuable security, which can be converted into money.

30.5 Whenever the LICENSOR exercises any right of Set off as envisaged
hereinabove, the LICENSOR shall expressly notify the LICENSEE company
immediately in writing that such right has either been exercised or is being
exercised.

31.  WAY LEAVE
31.1 LICENSEE shall make its own arrangements for Right of Way (ROW). However,
the Central Government will issue necessary notification if deemed fit under
Part III of the Indian Telegraph Act' 1885 on request of the LICENSEE. Provided
that non-availability of the ROW or delay in getting permission/clearance from
any agency shall not be construed or taken as an excuse for non-fulfillment of
the Roll-out obligations.

32.  FREQUENCY AUTHORISATION

                                       22
<PAGE>
32.1 A separate specific authorisation shall be required from the WPC wing of
the Department of Telecommunications, Ministry of Communications which will
permit utilization of appropriate frequencies/band for the establishment and
possession and operation of Wireless element of the Telecom Service under
specified terms and conditions including payment for said authorisation. Such
grant of authorisation will be governed by normal rules, procedures and
guidelines and will be subject to completion of necessary prescribed
formalities.

32.2 For this purpose, a separate application shall be made to the "Wireless
Advisor to the Government of India, WPC Wing, Department of Telecommunications,
Ministry of Communications, Dak Bhavan, Sansad Marg, New Delhi - 110 001" in a
prescribed application form available from WPC Wing.

32.3 Siting clearance in respect of fixed stations and its antenna mast shall be
obtained from the WPC Wing for which the applicant shall separately apply to the
Secretary, Standing Advisory Committee on Frequency Allocations (SACFA) WPC Wing
in a prescribed application form, to the following address:

     The Secretary (SACFA), WPC Wing,
     Ministry of Communications,
     Dak Bhavan, Sansad Marg,
     New Delhi - 110 001.

EXPLANATION: SACFA is the apex body in the Ministry of Communications for
------------
considering matters regarding coordination for frequency allocations and other
related issues/matters. (Siting clearance refers to the agreement of major
wireless users for location of proposed fixed antenna from the point of view of
compatibility with other radio systems and aviation hazard. It involves inter
departmental coordination and is an involved process). Normally the siting
clearance procedure may take two to six months depending on the nature of the
installations and the height of the antenna/masts.

32.4 For establishing various point to point radio links the frequency bands
earmarked for various agencies has been indicated in the National Frequency
Allocation Plan (hereinafter called NFAP) - 2000. Mere indication of the band
does not guarantee availability of the frequency spectrum which has to be
coordinated on case to case basis.

32.5 The LICENSEE shall not cause or allow to cause harmful interference to
other authorized users of radio spectrum. For elimination of harmful
interference LICENSEE shall abide by all instructions and orders issued by the
Government.

33.  In case of use of Satellite, the necessary coordination and clearance is to
be taken from Network Operations and Control Centre (NOCC) in respect of setting
up of Earth Station etc. apart from SACFA clearance and clearance from other
authorities.

                                       23
<PAGE>
                                                                      ANNEXURE-I

DEFINITIONS AND INTERPRETATIONS RELATING TO THE EXPRESSIONS USED IN THE TERMS &
-------------------------------------------------------------------------------
CONDITIONS OF NLD SERVICES LICENCE AGREEMENT
--------------------------------------------

     Unless the context otherwise requires, the different terms and expression
used in the LICENCE agreement shall have the meaning assigned to them in the
following paragraphs:

1.  "ACCESS PROVIDERS" means Basic Service Providers, Cellular Mobile Telephone
Service Providers, Cable Service Providers.

2.  "APPLICABLE SYSTEMS" means all the necessary equipment/sub-systems
engineered to provide National Long Distance Service in accordance with
operational, technical and quality requirements and other terms and conditions
of the LICENCE Agreement.

3.  "AUDITOR" means the LICENSEE's auditor for the time being appointed in
accordance with the requirements of the Companies Act, 1956.

4.  "CUSTOMER" includes any subscriber or any person or legal entity, which
subscribes to/avails of the National Long Distance Service from the LICENSEE.

5.  "DESIGNATED AUTHORITY" is the entity who is authorised or empowered by the
LICENSOR to operate the SERVICE.

6.  "DOT" means Department of Telecommunications, Government of India.

7.  `BSNL' means Bharat Sanchar Nigam Limited.

8.  "EFFECTIVE DATE" of the LICENCE is the date when the LICENCE is signed.

                                       24
<PAGE>
9.  FUNDAMENTAL PLAN: Fundamental plan include Numbering Plan, Traffic Routing
and Switching Plan and Transmission Plan issued by Department Of Telecom as
amended from time to time.

10.  "INFRASTRUCTURE PROVIDER(S) "mean a person or persons providing inactive
elements of the telecom network including dark fibers, right of way, duct space,
towers etc. as well as those who provide end-to-end bandwidth on a long-term
basis.

11.  "INTERCONNECTION" is as defined by the TRAI vide its regulations issued in
this respect.

12.  "INTERNATIONAL SERVICES" mean telecom services originating in the country
and terminating outside the country.

13.  INTER-CIRCLE TRAFFIC: Inter-Circle Traffic means the Long Distance traffic
originating in one telecom circle and terminating in another telecom circle.

14.  INTRA-CIRCLE TRAFFIC: Intra-Circle Traffic means Long Distance traffic
within boundaries of one telecom circle.

15.  "LICENCE" means a LICENCE granted or having effect as if granted under
section 4 of the Indian Telegraph Act 1885 or Indian Wireless Telegraphy Act
1933.

16.  "LICENSEE" is the registered Indian Company that has been awarded LICENCE
to set up and operate National Long Distance Service network and to provide the
National Long Distance service.

17.  "LICENSOR" refers to the President of India who grants LICENCE under
Section 4 of Indian Telegraph Act 1885 or Indian Wireless Telegraph Act 1933,
unless otherwise specified.

                                       25
<PAGE>
18.  "LICENSOR AUDITOR": means appointed for this purpose having same power
which the Statutory Auditors of the company enjoy under Section 227 of the
Companies Act, 1956.

19.  "LOCAL AREA" is the geographical area served by an exchange or an exchange
system. Calls originating and terminating with in the same local area are
charged at local call rates. Remote Subscribers' Unit and Concentrators are to
be treated as an exchange for the purposes of this definition.

20.  "LONG DISTANCE NETWORK" is a network of transmission and switching elements
connected in a predetermined fashion to provide switched bearer interconnection
between different SDCA. Physically the network elements may be co-located or be
a part of bigger elements.

21.  "LONG DISTANCE CALL" is defined as a call terminating in a local area other
than in which it is originated.

22.  LONG DISTANCE CHARGING AREA (LDCA): One of the several areas into which the
area of the country is divided and declared as such for the purpose of charging
for trunk calls which generally is co-terminus with Secondary Switching Area.

23.  LONG DISTANCE CHARGING CENTRE (LDCC): A particular Trunk Exchange in a
long distance charging area declared as such for the purpose of charging long
distance calls. Head quarters of SSAs are generally LDCCs.

24.  "MESSAGE" means anything covered within sub-section (3) of section 3 of
the Indian Telegraph Act 1885.

25.  `MTNL' means Mahanagar Telephone Nigam Limited.

                                       26
<PAGE>
26.  "NATIONAL LONG DISTANCE (NLD) SERVICE" refers to the carriage of switched
bearer telecommunication service over a long distance network i.e., a network
connecting different Short Distance Charging Areas (SDCAs).

27.  "NATIONAL LONG DISTANCE SERVICE PROVIDER" (also called NLDO) is the telecom
operator providing the required digital capacity to carry long distance
telecommunication service within the scope of this LICENCE which may include
various types of tele-services defined by the ITU, such as voice, data, fax,
text, video and multi-media etc.

28.  "NETWORTH" shall mean the sum total, in Indian rupees, of paid up equity
capital and free reserves converted at the prevalent conversion rate indicated
by the Reserve Bank of India on the date of the application.

29.  POINT OF PRESENCE (POP): Setting up of switching center and transmission
center of appropriate capacities by National Long Distance Service Provider at
the LDCC level to provide on demand inter-circle long distance services of
prescribed quality and grade of service in a non-discriminatory manner.

30.  "QUALITY OF SERVICE" is evaluated on the basis of observable measure on the
grade of service, calls lost due to wrong processing, the bit error rate or the
response time and also included acceptable grade of number of faults per unit
population of the subscriber served, the mean time to restore (MTTR), faults
carried over beyond the MTTR and the satisfactory disposal thereof.

31.  "REVENUE" for the purpose of levying LICENCE fee as a percentage of revenue
shall mean the Gross total Revenue income accruing to the LICENSEE by way of
providing NLD service under the LICENCE including the revenue on account of
supplementary/value added services and leasing of infrastructure, interest,
dividend etc. as reduced by the component part of a pass-through nature payable
to other service providers to whose networks

                                       27
<PAGE>
the LICENSEE's NLD network is interconnected, for carriage of calls. The Gross
Revenue shall also include previous debits (e.g. bad debts recovered, of excess
provisions in earlier years.) It is clarified that any lease or rent charges for
hiring of infrastructure shall not be so deducted. Service tax and sales tax
collected and passed on to the Government(s) from customers of the LICENSEE
shall not form a part of the Revenue.

32.  SERVICE: Service means the National Long Distance Service as defined in
Clause 2 of the Schedule I of this LICENCE.

33.  SHORT DISTANCE CHARGING AREA (SDCA): One of the several areas into which a
long distance charging area is divided and declared as such for the purpose of
charging for trunk calls. SDCAs, with few exceptions, coincide with revenue
tehsil/taluk.

34.  SHORT DISTANCE CHARGING CENTRE (SDCC): A particular exchange in short
distance charging area declared as such for the purpose of charging trunk calls.
Head quarters of SDCAs are generally SDCCs.

35.  "SPECIAL AUDITOR" means Auditors listed in the panel of Auditors having
same powers as of the companies auditor as envisaged in the Companies Act, 1956.

36.  "TARIFF" means rates and related conditions at which telecommunication
services within India and outside India may be provided including rates and
related conditions at which messages shall be transmitted, deposits,
installation fees, rentals, free calls, usage charges and any other related fees
or service charge and also the term tariff shall have the same meaning contained
in the Telecommunication Tariff Orders issued by the TRAI.

37.  `TRAI' means Telecom Regulatory Authority of India.

                                       28
<PAGE>
38.  "TEC" means Telecom Engineering Center.

39.  "VSNL" means Videsh Sanchar Nigam Ltd.

40.  `WPC' means Wireless Planning & Coordination Wing of the Ministry of
Communications.

41.  "USO", means Universal Service Obligation as enunciated in NTP-99 and
amended from time to time by the LICENSOR after considering the recommendations
of TRAI.

42.  "USF" means "Universal Service Fund" set up to meet expenditure on USO.

43.  "YEAR" for the purpose of the LICENCE Fee in the revenue share shall be the
financial year ending 31st March and the four quarters shall respectively end on
30th June, 30th September, 31st December and 31st March.

                                       29
<PAGE>
                                                                     ANNEXURE-II

             DETAILS OF LDCAS TO BE COVERED IN EACH PHASE INCLUDING

                      LIST OF UNECONOMIC AND REMOTE AREAS

                        (TO BE PROVIDED BY THE LICENSEE)

                                       30
<PAGE>
                                                                    ANNEXURE-III

              TELECOM CIRCLES AND THE AREAS COVERED BY THEM FOR THE
                             PURPOSE OF THIS LICENCE

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
S.N.           NAME OF CIRCLE                                            AREAS COVERED
-------------------------------------------------------------------------------------------------------------------------------
<S>         <C>                               <C>
01.         Andaman & Nicobar Island          Entire area falling within the Union Territory of Andaman & Nicobar Island.
-------------------------------------------------------------------------------------------------------------------------------
02.         Andhra Pradesh                    Entire area falling within the State of Andhra Pradesh.
-------------------------------------------------------------------------------------------------------------------------------
03.         Assam                             Entire area falling within the State of Assam.
-------------------------------------------------------------------------------------------------------------------------------
04.         Bihar                             Entire area falling within the State of Bihar
-------------------------------------------------------------------------------------------------------------------------------
05.         Delhi MTNL                        Entire area of Delhi Telephone System
-------------------------------------------------------------------------------------------------------------------------------
06.         Gujarat                           Entire area falling within the State of Gujarat and Union Territory of Daman and
                                              Diu, Silvassa (Dadra & Nagar Haveli).
-------------------------------------------------------------------------------------------------------------------------------
07.         Haryana                           Entire area falling within the State of Haryana
-------------------------------------------------------------------------------------------------------------------------------
08.         Himachal Pradesh                  Entire area falling within the State of Himachal Pradesh
-------------------------------------------------------------------------------------------------------------------------------
09.         Jammu & Kashmir                   Entire area falling within the State of Jammu & Kashmir including the autonomous
                                              council of Ladakh.
-------------------------------------------------------------------------------------------------------------------------------
10.         Karnataka                         Entire area falling within the State of Karnataka
-------------------------------------------------------------------------------------------------------------------------------
11.         Kerala                            Entire area falling within the State of Kerala and Union Territory of Lakshadeep
                                              and Minicoy.
-------------------------------------------------------------------------------------------------------------------------------
12.         Madhya Pradesh                    Entire area falling within the State of Madhya Pradesh
-------------------------------------------------------------------------------------------------------------------------------
13.         Maharashtra                       Entire area falling within the State of Maharashtra and Union Territory of Goa,
                                              including areas covered by MTNL Mumbai.
-------------------------------------------------------------------------------------------------------------------------------
14.         North East                        Entire area falling within the States of Arunachal Pradesh,  Meghalaya, Mizoram,
                                              Nagaland, Manipur and Tripura.
-------------------------------------------------------------------------------------------------------------------------------
15.         Orissa                            Entire area falling within the State of Orissa.
-------------------------------------------------------------------------------------------------------------------------------
16.         Punjab                            Entire area falling within the State of Punjab and Union territory of Chandigarh.
-------------------------------------------------------------------------------------------------------------------------------
17.         Rajasthan                         Entire area falling within the State of Rajasthan.
-------------------------------------------------------------------------------------------------------------------------------
18.         Tamilnadu                         Entire area falling within the State of Tamilnadu and Union Territory of
                                              Pondichery including the areas covered by Madras Telephone System.
-------------------------------------------------------------------------------------------------------------------------------
19.         Uttar Pradesh -- West             Entire area covered by Western Uttar Pradesh with the following as its boundary
                                              districts towards Eastern Uttar Pradesh: Pilibhit, Bareilly, Badaun, Etah,
                                              Mainpuri and Etawah.
-------------------------------------------------------------------------------------------------------------------------------
20.         Uttar Pradesh -- East             Entire area covered by Eastern Uttar Pradesh with the following as its boundary
                                              districts towards Western Uttar Pradesh: Shahjahanpur, Farrukhabad, Kanpur and
                                              Jalaun.
-------------------------------------------------------------------------------------------------------------------------------
21.         West Bengal                       Entire area falling within the State of West Bengal and the State of Sikkim
                                              including the areas covered by Calcutta Telephone System.
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>

NOTE: Yenum, an area of Union Territory of Pondicherry is served under Andhra
Pradesh Telecom Circle in East Godavari LDCA.

                                       31
<PAGE>
                                                                     ANNEXURE-IV

                      LIST OF LONG DISTANCE CHARGING AREAS

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
S.NO.             NAME OF THE CIRCLE                           NAME OF LDCA
----------------------------------------------------------------------------------------------
<S>               <C>                                     <C>
1.                Andaman & Nicobar Islands               1. Andaman & Nicobar
----------------------------------------------------------------------------------------------
2.                Andhra Pradesh                          2. Adilabad
-----------------                                        -------------------------------------
                                                          3. Anantpur (Guntkal)
-----------------                                        -------------------------------------
                                                          4. Chittoor
-----------------                                        -------------------------------------
                                                          5. Cuddapah
-----------------                                        -------------------------------------
                                                          6. Rajahmundry
-----------------                                        -------------------------------------
                                                          7. Guntur
-----------------                                        -------------------------------------
                                                          8. Hyderabad
-----------------                                        -------------------------------------
                                                          9. Karimnagar
-----------------                                        -------------------------------------
                                                          10. Khammam
-----------------                                        -------------------------------------
                                                          11. Vijayavada
-----------------                                        -------------------------------------
                                                          12. Kurnool
-----------------                                        -------------------------------------
                                                          13. Mahaboobnagar
-----------------                                        -------------------------------------
                                                          14. Sangareddy
-----------------                                        -------------------------------------
                                                          15. Nalgonda
-----------------                                        -------------------------------------
                                                          16. Nellore
-----------------                                        -------------------------------------
                                                          17. Nizamabad
-----------------                                        -------------------------------------
                                                          18. Ongole
-----------------                                        -------------------------------------
                                                          19. Srikakulum
-----------------                                        -------------------------------------
                                                          20. Vijainagaram
-----------------                                        -------------------------------------
                                                          21. Visakhapatnam
-----------------                                        -------------------------------------
                                                          22. Warangal
-----------------                                        -------------------------------------
                                                          23. Eluru
----------------------------------------------------------------------------------------------
3.                Assam                                   24. Tinsukia (Dibrugarh)
-----------------                                        -------------------------------------
                                                          25. Guwahati
-----------------                                        -------------------------------------
                                                          26. Jorhat
-----------------                                        -------------------------------------
                                                          27. Bongaigaon (Kokrajhar)
-----------------                                        -------------------------------------
                                                          28. Nagaon
-----------------                                        -------------------------------------
                                                          29. Silchar
-----------------                                        -------------------------------------
                                                          30. Tejpur
----------------------------------------------------------------------------------------------
4.                Bihar                                   31. Arrah
-----------------                                        -------------------------------------
                                                          32. Bhagalpur
-----------------                                        -------------------------------------
                                                          33. Chapra
-----------------                                        -------------------------------------
                                                          34. Daltonganj
-----------------                                        -------------------------------------
                                                          35. Darbhanga
-----------------                                        -------------------------------------
                                                          36. Deoghar (Dumka)
-----------------                                        -------------------------------------
                                                          37. Dhanbad
-----------------                                        -------------------------------------
                                                          38. Gaya
-----------------                                        -------------------------------------
                                                          39. Hazaribagh
-----------------                                        -------------------------------------
                                                          40. Jamshedpur
-----------------                                        -------------------------------------
</TABLE>

                                       32
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
S.NO.             NAME OF THE CIRCLE                           NAME OF LDCA
----------------------------------------------------------------------------------------------
<S>               <C>                                     <C>
                                                          41. Katihar
-----------------                                        -------------------------------------
                                                          42. Monghyr
-----------------                                        -------------------------------------
                                                          43. Motihari
-----------------                                        -------------------------------------
                                                          44. Muzaffarpur
-----------------                                        -------------------------------------
                                                          45. Patna
-----------------                                        -------------------------------------
                                                          46. Ranchi
-----------------                                        -------------------------------------
                                                          47. Saharasa
-----------------                                        -------------------------------------
                                                          48. Sasaram
----------------------------------------------------------------------------------------------
5.                Gujarat                                 49. Ahmedabad
-----------------                                        -------------------------------------
                                                          50. Amreli
-----------------                                        -------------------------------------
                                                          51. Bharuch
-----------------                                        -------------------------------------
                                                          52. Bhavnagar
-----------------                                        -------------------------------------
                                                          53. Bhuj
-----------------                                        -------------------------------------
                                                          54. Godhra
-----------------                                        -------------------------------------
                                                          55. Himatnagar
-----------------                                        -------------------------------------
                                                          56. Jamnagar
-----------------                                        -------------------------------------
                                                          57. Junagar
-----------------                                        -------------------------------------
                                                          58. Mehsana
-----------------                                        -------------------------------------
                                                          59. Nadiad
-----------------                                        -------------------------------------
                                                          60. Palanpur
-----------------                                        -------------------------------------
                                                          61. Rajkot
-----------------                                        -------------------------------------
                                                          62. Surat
-----------------                                        -------------------------------------
                                                          63. Surendernagar
-----------------                                        -------------------------------------
                                                          64. Vadodara
-----------------                                        -------------------------------------
                                                          65. Valsad
----------------------------------------------------------------------------------------------
6.                Himachal Pradesh                        66. Hamirpur
-----------------                                        -------------------------------------
                                                          67. Kangra (Dharamsala)
-----------------                                        -------------------------------------
                                                          68. Kulu
-----------------                                        -------------------------------------
                                                          69. Mandi
-----------------                                        -------------------------------------
                                                          70. Simla
-----------------                                        -------------------------------------
                                                          71. Solan
----------------------------------------------------------------------------------------------
7.                Haryana                                 72. Ambala
-----------------                                        -------------------------------------
                                                          73. Gurgaon
-----------------                                        -------------------------------------
                                                          74. Hissar
-----------------                                        -------------------------------------
                                                          75. Jind
-----------------                                        -------------------------------------
                                                          76. Karnal
-----------------                                        -------------------------------------
                                                          77. Narnaul
-----------------                                        -------------------------------------
                                                          78. Rohtak
-----------------                                        -------------------------------------
                                                          79. Sonepat
----------------------------------------------------------------------------------------------
8.                Jammu & Kashmir                         80. Jammu
-----------------                                        -------------------------------------
                                                          81. Leh
-----------------                                        -------------------------------------
                                                          82. Rajouri
-----------------                                        -------------------------------------
                                                          83. Srinagar
-----------------                                        -------------------------------------
                                                          84. Udhampur
----------------------------------------------------------------------------------------------
9.                Kerala                                  85. Alleppey
-----------------                                        -------------------------------------
                                                          86. Cannonore
-----------------                                        -------------------------------------
                                                          87. Ernakulam
-----------------                                        -------------------------------------
</TABLE>

                                       33
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
S.NO.             NAME OF THE CIRCLE                           NAME OF LDCA
----------------------------------------------------------------------------------------------
<S>               <C>                                     <C>
                                                          88. Kavaratty
-----------------                                        -------------------------------------
                                                          89. Kottayam
-----------------                                        -------------------------------------
                                                          90. Calicut (Kozhikode)
-----------------                                        -------------------------------------
                                                          91. Palghat
-----------------                                        -------------------------------------
                                                          92. Quilon
-----------------                                        -------------------------------------
                                                          93. Tiruvalla
-----------------                                        -------------------------------------
                                                          94. Trichur
-----------------                                        -------------------------------------
                                                          95. Thiruvananthapuram
----------------------------------------------------------------------------------------------
10.               Karnataka                               96. Bangalore
-----------------                                        -------------------------------------
                                                          97. Belgaum
-----------------                                        -------------------------------------
                                                          98. Bellary
-----------------                                        -------------------------------------
                                                          99. Bidar
-----------------                                        -------------------------------------
                                                          100. Bijapur
-----------------                                        -------------------------------------
                                                          101. Chickmangalore
-----------------                                        -------------------------------------
                                                          102. Devangere
-----------------                                        -------------------------------------
                                                          103. Gulbarga
-----------------                                        -------------------------------------
                                                          104. Hassan
-----------------                                        -------------------------------------
                                                          105. Hubli
-----------------                                        -------------------------------------
                                                          106. U. Kannada (Karwar)
-----------------                                        -------------------------------------
                                                          107. Kolar
-----------------                                        -------------------------------------
                                                          108. Mandya
-----------------                                        -------------------------------------
                                                          109. D. Kanada (Mangalore)
-----------------                                        -------------------------------------
                                                          110. Kodagu (Madikeri)
-----------------                                        -------------------------------------
                                                          111. Mysore
-----------------                                        -------------------------------------
                                                          112. Shimoga
-----------------                                        -------------------------------------
                                                          113. Raichur
-----------------                                        -------------------------------------
                                                          114. Tumkur
----------------------------------------------------------------------------------------------
11.               Maharashtra                             115. Ahmednagar
-----------------                                        -------------------------------------
                                                          116. Akola
-----------------                                        -------------------------------------
                                                          117. Amravati
-----------------                                        -------------------------------------
                                                          118. Augangabad
-----------------                                        -------------------------------------
                                                          119. Bhandara
-----------------                                        -------------------------------------
                                                          120. Bhir
-----------------                                        -------------------------------------
                                                          121. Mumbay
-----------------                                        -------------------------------------
                                                          122. Buldana
-----------------                                        -------------------------------------
                                                          123. Chandrapur
-----------------                                        -------------------------------------
                                                          124. Dhulia
-----------------                                        -------------------------------------
                                                          125. Gadchuroli
-----------------                                        -------------------------------------
                                                          126. Jalgaon
-----------------                                        -------------------------------------
                                                          127. Jalna
-----------------                                        -------------------------------------
                                                          128. Kalyan
-----------------                                        -------------------------------------
                                                          129. Kolhapur
-----------------                                        -------------------------------------
                                                          130. Kudal
-----------------                                        -------------------------------------
                                                          131. Latur
-----------------                                        -------------------------------------
                                                          132. Nagpur
-----------------                                        -------------------------------------
                                                          133. Nanded
-----------------                                        -------------------------------------
                                                          134. Nasik
-----------------                                        -------------------------------------
</TABLE>

                                       34
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
S.NO.             NAME OF THE CIRCLE                           NAME OF LDCA
----------------------------------------------------------------------------------------------
<S>               <C>                                     <C>
                                                          135. Osmanabad
-----------------                                        -------------------------------------
                                                          136. Panaji
-----------------                                        -------------------------------------
                                                          137. Parbhani
-----------------                                        -------------------------------------
                                                          138. Pen
-----------------                                        -------------------------------------
                                                          139. Pune
-----------------                                        -------------------------------------
                                                          140. Ratnagiri
-----------------                                        -------------------------------------
                                                          141. Sangli
-----------------                                        -------------------------------------
                                                          142. Satara
-----------------                                        -------------------------------------
                                                          143. Solapur
-----------------                                        -------------------------------------
                                                          144. Wardha
-----------------                                        -------------------------------------
                                                          145. Yeotmal
----------------------------------------------------------------------------------------------
12.               Madhya Pradesh                          146. Sarguja (Ambikapur)
-----------------                                        -------------------------------------
                                                          147. Balaghat
-----------------                                        -------------------------------------
                                                          148. Betul
-----------------                                        -------------------------------------
                                                          149. Bhopal
-----------------                                        -------------------------------------
                                                          150. Bilaspur
-----------------                                        -------------------------------------
                                                          151. Chhatarpur
-----------------                                        -------------------------------------
                                                          152. Chhindwara
-----------------                                        -------------------------------------
                                                          153. Damoh
-----------------                                        -------------------------------------
                                                          154. Dewas
-----------------                                        -------------------------------------
                                                          155. Dhar
-----------------                                        -------------------------------------
                                                          156. Durg
-----------------                                        -------------------------------------
                                                          157. Guna
-----------------                                        -------------------------------------
                                                          158. Gwalior
-----------------                                        -------------------------------------
                                                          159. Indore
-----------------                                        -------------------------------------
                                                          160. Itarsi
-----------------                                        -------------------------------------
                                                          161. Jabalpur
-----------------                                        -------------------------------------
                                                          162. Jagdalpur
-----------------                                        -------------------------------------
                                                          163. Jhabua
-----------------                                        -------------------------------------
                                                          164. Khandwa
-----------------                                        -------------------------------------
                                                          165. Khargone
-----------------                                        -------------------------------------
                                                          166. Mandla
-----------------                                        -------------------------------------
                                                          167. Mandsaur
-----------------                                        -------------------------------------
                                                          168. Morena
-----------------                                        -------------------------------------
                                                          169. Narsinghpur
-----------------                                        -------------------------------------
                                                          170. Panna
-----------------                                        -------------------------------------
                                                          171. Raigarh
-----------------                                        -------------------------------------
                                                          172. Raipur
-----------------                                        -------------------------------------
                                                          173. Raisen
-----------------                                        -------------------------------------
                                                          174. Rajgarh
-----------------                                        -------------------------------------
                                                          175. Ratlam
-----------------                                        -------------------------------------
                                                          176. Rewa
-----------------                                        -------------------------------------
                                                          177. Sagar
-----------------                                        -------------------------------------
                                                          178. Satna
-----------------                                        -------------------------------------
                                                          179. Seoni
-----------------                                        -------------------------------------
                                                          180. Shahdol
-----------------                                        -------------------------------------
                                                          181. Shajapur
-----------------                                        -------------------------------------
</TABLE>

                                       35
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
S.NO.             NAME OF THE CIRCLE                           NAME OF LDCA
----------------------------------------------------------------------------------------------
<S>               <C>                                     <C>
                                                          182. shivpuri
-----------------                                        -------------------------------------
                                                          183. Sidhi
-----------------                                        -------------------------------------
                                                          184. Ujjain
-----------------                                        -------------------------------------
                                                          185. Vidisha
----------------------------------------------------------------------------------------------
13.               North-East                              186. Tripura (Agartala)
-----------------                                        -------------------------------------
                                                          187. Mizoram (Aizwal)
-----------------                                        -------------------------------------
                                                          188. Manipur (Imphal)
----------------------------------------------------------------------------------------------
                                                          189. Nagaland (Kohima)
-----------------                                        -------------------------------------
                                                          190. Meghalaya (Shillong)
-----------------                                        -------------------------------------
                                                          191. Arunachal Pradesh (Zero)
----------------------------------------------------------------------------------------------
14.               Orissa                                  192. Balasore
-----------------                                        -------------------------------------
                                                          193. Baripada
-----------------                                        -------------------------------------
                                                          194. Berhampur
-----------------                                        -------------------------------------
                                                          195. Bhwanipatna
-----------------                                        -------------------------------------
                                                          196. Bhubaneshwar (Puri)
-----------------                                        -------------------------------------
                                                          197. Bolangir
-----------------                                        -------------------------------------
                                                          198. Cuttack
-----------------                                        -------------------------------------
                                                          199. Dhenkanal
-----------------                                        -------------------------------------
                                                          200. Koraput
-----------------                                        -------------------------------------
                                                          201. Phulbani
-----------------                                        -------------------------------------
                                                          202. Sundargarh (Rourkela)
-----------------                                        -------------------------------------
                                                          203. Sambalpur
----------------------------------------------------------------------------------------------
15.               Punjab                                  204. Amritsar
-----------------                                        -------------------------------------
                                                          205. Bhatinda
-----------------                                        -------------------------------------
                                                          206. Chandigarh
-----------------                                        -------------------------------------
                                                          207. Ferozepur
-----------------                                        -------------------------------------
                                                          208. Hosharipur
-----------------                                        -------------------------------------
                                                          209. Jalandhar
-----------------                                        -------------------------------------
                                                          210. Ludhiana
-----------------                                        -------------------------------------
                                                          211. Pathankot
-----------------                                        -------------------------------------
                                                          212. Patiala
-----------------                                        -------------------------------------
                                                          213. Ropar
-----------------                                        -------------------------------------
                                                          214. Sangrur
----------------------------------------------------------------------------------------------
16.               Rajasthan                               215. Ajmer
-----------------                                        -------------------------------------
                                                          216. Alwar
-----------------                                        -------------------------------------
                                                          217. Banswara
-----------------                                        -------------------------------------
                                                          218. Barmer
-----------------                                        -------------------------------------
                                                          219. Bharatpur
-----------------                                        -------------------------------------
                                                          220. Bhilwara
-----------------                                        -------------------------------------
                                                          221. Bikaner
-----------------                                        -------------------------------------
                                                          222. Bundi
-----------------                                        -------------------------------------
                                                          223. Chittorgarh
-----------------                                        -------------------------------------
                                                          224. Churu
-----------------                                        -------------------------------------
                                                          225. Jaipur
-----------------                                        -------------------------------------
                                                          226. Jaisalmer
-----------------                                        -------------------------------------
                                                          227. Jhalawar
-----------------                                        -------------------------------------
                                                          228. Jhunjhunu
-----------------                                        -------------------------------------
</TABLE>

                                       36
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
S.NO.             NAME OF THE CIRCLE                           NAME OF LDCA
----------------------------------------------------------------------------------------------
<S>               <C>                                     <C>
                                                          229. Jodhpur
-----------------                                        -------------------------------------
                                                          230. Kota
-----------------                                        -------------------------------------
                                                          231. Nagaur
-----------------                                        -------------------------------------
                                                          232. Pali (Marwar)
-----------------                                        -------------------------------------
                                                          233. Sawaimadhopur
-----------------                                        -------------------------------------
                                                          234. Sikar
-----------------                                        -------------------------------------
                                                          235. Sirohi
-----------------                                        -------------------------------------
                                                          236. Siriganganagar
-----------------                                        -------------------------------------
                                                          237. Tonk
-----------------                                        -------------------------------------
                                                          238. Udaipur.
----------------------------------------------------------------------------------------------
17.               Tamilnadu                               239. Chennai
-----------------                                        -------------------------------------
                                                          240. Coimbatore
-----------------                                        -------------------------------------
                                                          241. Cuddalore
-----------------                                        -------------------------------------
                                                          242. Dharmapuri
-----------------                                        -------------------------------------
                                                          243. Erode
-----------------                                        -------------------------------------
                                                          244. (Chinglpet) (Kancheepuram)
-----------------                                        -------------------------------------
                                                          245. Karaikudi
-----------------                                        -------------------------------------
                                                          246. Madurai
-----------------                                        -------------------------------------
                                                          247. Nagarcoil
-----------------                                        -------------------------------------
                                                          248. Ooty
-----------------                                        -------------------------------------
                                                          249. Pondicherry
-----------------                                        -------------------------------------
                                                          250. Salem
-----------------                                        -------------------------------------
                                                          251. Thanjavur
-----------------                                        -------------------------------------
                                                          252. Tirunelvelli
-----------------                                        -------------------------------------
                                                          253. Trichy
-----------------                                        -------------------------------------
                                                          254. Tuticorn
-----------------                                        -------------------------------------
                                                          255. Vellore
-----------------                                        -------------------------------------
                                                          256. Virudunagar
----------------------------------------------------------------------------------------------
18.               U.P. (East)                             257. Allahabad
-----------------                                        -------------------------------------
                                                          258. Azamgarh
-----------------                                        -------------------------------------
                                                          259. Bahraich
-----------------                                        -------------------------------------
                                                          260. Ballia
-----------------                                        -------------------------------------
                                                          261. Banda
-----------------                                        -------------------------------------
                                                          262. Barabanki
-----------------                                        -------------------------------------
                                                          263. Basti
-----------------                                        -------------------------------------
                                                          264. Deoria
-----------------                                        -------------------------------------
                                                          265. Etawah
-----------------                                        -------------------------------------
                                                          266. Faizabad
-----------------                                        -------------------------------------
                                                          267. Farukhabad
-----------------                                        -------------------------------------
                                                          268. Fatehpur
-----------------                                        -------------------------------------
                                                          269. Ghazipur
-----------------                                        -------------------------------------
                                                          270. Gonda
-----------------                                        -------------------------------------
                                                          271. Gorakhpur
-----------------                                        -------------------------------------
                                                          272. Hamirpur
-----------------                                        -------------------------------------
                                                          273. Hardoi
-----------------                                        -------------------------------------
                                                          274. Jaunpur
-----------------                                        -------------------------------------
</TABLE>

                                       37
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
S.NO.             NAME OF THE CIRCLE                           NAME OF LDCA
----------------------------------------------------------------------------------------------
<S>               <C>                                     <C>
                                                          275. Jhansi
-----------------                                        -------------------------------------
                                                          276. Kanpur
-----------------                                        -------------------------------------
                                                          277. Kheri
-----------------                                        -------------------------------------
                                                          278. Lucknow
-----------------                                        -------------------------------------
                                                          279. Mainpuri
-----------------                                        -------------------------------------
                                                          280. Mirzapur
-----------------                                        -------------------------------------
                                                          281. Orai
-----------------                                        -------------------------------------
                                                          282. Pratapgarh
-----------------                                        -------------------------------------
                                                          283. Rae Bareli
-----------------                                        -------------------------------------
                                                          284. Shahjahanpur
-----------------                                        -------------------------------------
                                                          285. Sitapur
-----------------                                        -------------------------------------
                                                          286. Sultanpur
-----------------                                        -------------------------------------
                                                          287. Unnao
-----------------                                        -------------------------------------
                                                          288. Varanasi
----------------------------------------------------------------------------------------------
19.               UP (West)                               289. Agra
-----------------                                        -------------------------------------
                                                          290. Aligarh
-----------------                                        -------------------------------------
                                                          291. Almora
-----------------                                        -------------------------------------
                                                          292. Badaun
-----------------                                        -------------------------------------
                                                          293. Bareilly
-----------------                                        -------------------------------------
                                                          294. Bijnore
-----------------                                        -------------------------------------
                                                          295. Kotdwara
-----------------                                        -------------------------------------
                                                          296. Dehradun
-----------------                                        -------------------------------------
                                                          297. Etah
-----------------                                        -------------------------------------
                                                          298. Ghaziabad
-----------------                                        -------------------------------------
                                                          299. Mathura
-----------------                                        -------------------------------------
                                                          300. Meerut
-----------------                                        -------------------------------------
                                                          301. Muradabad
-----------------                                        -------------------------------------
                                                          302. Muzaffarnagar
-----------------                                        -------------------------------------
                                                          303. Nainital
-----------------                                        -------------------------------------
                                                          304. Pilibhit
-----------------                                        -------------------------------------
                                                          305. Rampur
-----------------                                        -------------------------------------
                                                          306. Saharanpur
-----------------                                        -------------------------------------
                                                          307. Uttarkashi
----------------------------------------------------------------------------------------------
20.               West Bengal                             308. Asansol
-----------------                                        -------------------------------------
                                                          309. Bankura
-----------------                                        -------------------------------------
                                                          310. Berhampur
-----------------                                        -------------------------------------
                                                          311. Calcutta
-----------------                                        -------------------------------------
                                                          312. Coochbehar
-----------------                                        -------------------------------------
                                                          313. Gangtok
-----------------                                        -------------------------------------
                                                          314. Jalpaiguri
-----------------                                        -------------------------------------
                                                          315. Midnapur (Kharagpur)
-----------------                                        -------------------------------------
                                                          316. Krishnagar
-----------------                                        -------------------------------------
                                                          317. Malda
-----------------                                        -------------------------------------
                                                          318. Purulia
-----------------                                        -------------------------------------
                                                          319. Balurghat (Raiganj)
-----------------                                        -------------------------------------
                                                          320. Darjeeling (Siliguri)
-----------------                                        -------------------------------------
                                                          321. Suri
----------------------------------------------------------------------------------------------
</TABLE>

                                       38
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
S.NO.             NAME OF THE CIRCLE                           NAME OF LDCA
----------------------------------------------------------------------------------------------
<S>               <C>                                     <C>
21.               METROS                                  322. Delhi
-----------------                                        -------------------------------------
                                                          Calcutta *
-----------------                                        -------------------------------------
                                                          Chennai *
-----------------                                        -------------------------------------
                                                          Mumbai *
----------------------------------------------------------------------------------------------
</TABLE>

-    THESE METROS ARE PART OF THEIR RESPECTIVE TELECOM CIRCLES AS SHOWN
                                       IN            ANNEXURE-III ALSO.
     ---------------------------------    ----------

                                       39
<PAGE>
                                                                     ANNEXURE-IV

             MINIMUM NETWORK ROLL OUT OBLIGATIONS FOR NATIONAL LONG
             DISTANCE OPERATORS FOR ESTABLISHING POINT OF PRESENCE

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
                          TIME
                          PERIOD           CUMULATIVE PERCENTAGE OF         CUMULATIVE PERCENTAGE
                        (FROM THE        NATIONAL COVERAGE AT THE LDCA          OF COVERAGE OF
                        EFFECTIVE        LEVEL WHERE POINT OF PRESENCE          UNECONOMIC AND
PHASE                     DATE)             HAS TO BE ESTABLISHED                REMOTE AREAS
-----------------------------------------------------------------------------------------------------
<S>                     <C>              <C>                                <C>
I                       2 Years                        15                                2
-----------------------------------------------------------------------------------------------------
II                      3 Years                        40                                4
-----------------------------------------------------------------------------------------------------
III                     4 Years                        80                                7
-----------------------------------------------------------------------------------------------------
IV                      5-7 Years                      100                              All
-----------------------------------------------------------------------------------------------------
</TABLE>

POINT OF PRESENCE (POP): Setting up of switching center and transmission center
of appropriate capacity by NLDO at the LDCC level to provide on demand
inter-circle long distance services of prescribed quality and grade of service
in a non-discriminatory manner.

                                       40
<PAGE>
                                                                      ANNEXURE-V

                    LIST OF REMOTE/UNECONOMIC AREAS (LDCAS)
                    ---------------------------------------

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
S.NO        NAME OF THE LDCA                                 NAME OF CIRCLE
----------------------------------------------------------------------------------
<S>         <C>                                              <C>
1.          Port Blair                                       Andaman & Nicobar
----------------------------------------------------------------------------------
2.          Cachar (Silchar)                                 Assam
------------------------------------------------------------
3.          Bongajgaon
------------------------------------------------------------
4.          Kamrup
------------------------------------------------------------
5.          Dibrugarh
------------------------------------------------------------
6.          Nagaon
------------------------------------------------------------
7.          Jorhat
------------------------------------------------------------
8.          Sonpur (Tejpur)
----------------------------------------------------------------------------------
9.          Kavarathy (Lakshdweep)                           Kerala
----------------------------------------------------------------------------------
10.         Arunachal Pradesh
------------------------------------------------------------
11.         Imphal (Manipur)
------------------------------------------------------------
12.         Shillong (Meghalaya)                             North East
------------------------------------------------------------
13          Aizwal (Mizoram)
------------------------------------------------------------
14.         Kohima (Nagaland)
------------------------------------------------------------
15.         Agartala (Tripura)
----------------------------------------------------------------------------------
16.         Gangtok (Sikkim)                                 West Bengal
----------------------------------------------------------------------------------
17.         Saharsa
------------------------------------------------------------
18.         Dumka
------------------------------------------------------------
19.         Motihari                                         Bihar
----------------------------------------------------------------------------------
20.         Phulbani
------------------------------------------------------------
21.         Baripara                                         Orissa
------------------------------------------------------------
22.         Koraput
----------------------------------------------------------------------------------
23.         Balaghat
------------------------------------------------------------
24.         Betul
------------------------------------------------------------
25.         Jhabua                                           M.P.
------------------------------------------------------------
26.         Mandala
------------------------------------------------------------
27.         Morana
------------------------------------------------------------
28.         Rajgarh
------------------------------------------------------------
29.         Sarguja
----------------------------------------------------------------------------------
30.         Almora
------------------------------------------------------------
31.         Kotdwar
------------------------------------------------------------
32.         Uttarkashi                                       U.P. (West)
----------------------------------------------------------------------------------
33.         Shimla
------------------------------------------------------------
34.         Solan
------------------------------------------------------------
35.         Kullu
------------------------------------------------------------
36.         Mandi                                            H.P.
------------------------------------------------------------
37.         Hamirpur
------------------------------------------------------------
38.         Dharamsala
----------------------------------------------------------------------------------
39.         Srinagar
------------------------------------------------------------
40.         Jammu
------------------------------------------------------------
41.         Udhampur                                         J&K
------------------------------------------------------------
42.         Rajouri
------------------------------------------------------------
43.         Leh
----------------------------------------------------------------------------------
</TABLE>

                                       41
<PAGE>
                                                                      ANNEXURE-A

                 FORMAT OF STATEMENT OF REVENUE AND LICENCE FEE
                                          (NAME AND ADDRESS OF OPERATOR)
      -----------------------------------

                         NATIONAL LONG DISTANCE SERVICE
  STATEMENT OF REVENUE AND LICENCE FEE FOR THE QUARTER
                                                       ---------------------
            OF THE FINANCIAL YEAR
                                  ---------------------------

<TABLE>
<CAPTION>
                                                                                           (AMOUNT IN RUPEES)
-------------------------------------------------------------------------------------------------------------
  S.N.    PARTICULARS                               ACTUALS FOR THE     ESTIMATED FOR     CUMULATIVE UPTO
                                                   PREVIOUS QUARTER      THE CURRENT        THE PREVIOUS
                                                                           QUARTER            QUARTER
-------------------------------------------------------------------------------------------------------------
<S>       <C>                                      <C>                  <C>               <C>
1.        REVENUE FROM SERVICES:
-------------------------------------------------------------------------------------------------------------
      i.  Revenue from provisioning of NLD
          service as defined in clause 2 of
          schedule-I of the Licence agreement
-------------------------------------------------------------------------------------------------------------
     ii.  Revenue from supplementary/value
          added services.
-------------------------------------------------------------------------------------------------------------
    iii.  Service Tax
-------------------------------------------------------------------------------------------------------------
     iv.  Any other income/miscellaneous
          receipt .
-------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------
2.        INCOME FROM INVESTMENTS.
-------------------------------------------------------------------------------------------------------------
      i.  Interest income
-------------------------------------------------------------------------------------------------------------
     ii.  Dividend income
-------------------------------------------------------------------------------------------------------------
    iii.  Any other miscellaneous receipt from
          investments.
-------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------
3.        NON-REFUNDABLE DEPOSITS.
-------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------
4.        REVENUE FROM SHARING/LEASING OF OTHER
          INFRASTRUCTURE
-------------------------------------------------------------------------------------------------------------
5.        MISCELLANEOUS REVENUE.
-------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------
AA        GROSS REVENUE OF THE LICENSEE COMPANY:
-------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------
          DEDUCT:
-------------------------------------------------------------------------------------------------------------
1.        Revenue of pass thru nature actually
          passed on to other service
          providers. (operator-wise details).
          Note: Lease/rent charges for hiring
          of infrastructure not to be deducted.
-------------------------------------------------------------------------------------------------------------
2.        Service Tax paid to the Government.
-------------------------------------------------------------------------------------------------------------
BB        TOTAL DEDUCTIBLE REVENUE
-------------------------------------------------------------------------------------------------------------
CC        ADJUSTED GROSS REVENUE: (AA - BB)
-------------------------------------------------------------------------------------------------------------
          REVENUE SHARE @               OF
                          -------------
          ADJUSTED GROSS REVENUE:
-------------------------------------------------------------------------------------------------------------
</TABLE>

                                       42
<PAGE>
                                   AFFIDAVIT
                                   ---------

I                                       , aged about                years son of
  --------------------------------------             --------------
Shri                      , resident of
     ---------------------              --------------------------------------,
do solemnly affirm and state as under:

1.   That I am                                     of
               -----------------------------------    -----------------------
     (Name of the Company), Licensee of
                                       --------------------------------------
     Service in                                   Service Area and I am duly
                ---------------------------------
     authorised by the resolutions dated                              passed by
                                         ----------------------------
     Board of Directors of the Company to furnish affidavit on behalf of
                                    ( Name of the Company).
     ------------------------------

2.   That in compliance of condition No.          of Schedule               Part
                                         --------             -------------
                and Annexure                       of the Licence Agreement
     ----------              ---------------------
     No.                        signed between the Company and the Department
         ----------------------
     Of Telecommunications, for payment of Licence fee, a payment of
     Rs.                         (Rupees                                    is
         -----------------------         ----------------------------------
     being made for the period                         to                     .
                               -----------------------    -------------------
     The details of calculation of `revenue' and Licence fee is as per
     Annexure                 (attached).
              ---------------

3.   That the contents in para 1 & 2 and Annexure - A are true and correct to
     the best of my knowledge, based on the records of the company.

                                                                       Deponent.

VERIFICATION
------------

Verified at                         on                               that the
            -----------------------    -----------------------------
contents of paragraphs 1 to 3 of the affidavit and Annexure - A are true and
correct to my knowledge, no part of it is false and nothing has been concealed
therefrom.

                                                                       Deponent.

                                       43
<PAGE>
                                                                      ANNEXURE-B

       FORMAT OF AUDITOR'S REPORT ON STATEMENT OF REVENUE AND LICENCE FEE
       ------------------------------------------------------------------

To

The Board of Directors

----------------------------

----------------------------

     We have examined the attached Statement of Revenue and Licence Fee of
                                                    (the name of the operators)
---------------------------------------------------
for the quarter(s) ending              . We have also examined the
                          -------------
reconciliation of the cumulative figures for the quarter(s) ending
                appearing in the Statement of Revenue and Licence Fee of the
---------------
company with the figures appearing in the profit and loss account of the company
for the year ended                which was audited by us. We understand that
                   --------------
the aforesaid statement(s) (and the reconciliation) is/are to be furnished to
the Central Government for assessment of the Licence fee payable by the company
to the Government, in terms of the Licence Agreement No.
                                                         -----------------------
signed between the company and the Department of Telecommunications. We report
that:

1.   We have obtained all the information and explanations which to the best of
     our knowledge and belief were necessary for the purposes of our audit.

2.   In our view, the company has an adequate internal control system in
     relation to revenues which is commensurate with its size and the nature of
     its business. The system, in our opinion, provides reasonable assurance
     that there is no unrecorded revenue and that all revenue is recorded in the
     proper amount and in the proper period.

3.   No amounts payable in respect of sales tax, service tax or
     PSTN/toll/roaming charges were outstanding at the last day of the
     quarter(s) for a period of more than two months from the date they became
     payable, except for the following:
                                        -----------------------

4.   In our opinion and to the best of our knowledge and belief and according to
     the explanations given to us, the Statement has been prepared in accordance
     with the norms/guidelines contained in the said Licence agreement in this
     behalf and gives a true and fair view of the revenue and Licence fee
     payable for the period computed on the basis of the aforesaid guidelines
     except for the following:

*    Strike off wherever not applicable.

                                       44
<PAGE>
                                                                    ANNEXURE - C

              NORMS FOR PREPARATION OF ANNUAL FINANCIAL STATEMENTS
              ----------------------------------------------------

-    Accounts shall be maintained separately for each telecom service operated
     by the licensee company.

-    Any category of accrued revenue, the amount of which exceeds 5% of the
     total accrued revenue, shall be shown separately and not combined with any
     other item/category.

-    Accrued Revenue shall indicate:
     (a)  All amounts billable for the period.

     (b)  Any billings for previous years that had been omitted from the
          previous years' P&L Accounts.

     (c)  Any non-refundable deposits collected from the customers/franchisees
          to the extent these are credited to P&L Account for the year.

-    Subsidiary registers/ledgers shall be maintained for each item given above
     so as to enable easy verification.

-    Service revenue (amount billable) shall be shown gross and details of
     discount/rebate indicated separately.

-    Security or any other Deposits taken from the subscriber shall be shown
     separately, for each category, and the amount that has fallen due for
     refund but not yet paid also disclosed under two categories, namely:

     -    Up to 45 days

     -    More than 45 days.

-    Service Tax billed, collected and remitted to the Government shall be shown
     separately.

-    Sales Tax billed, collected and remitted to the Government shall be shown
     separately.

-    Details of Income from sales of goods shall be furnished indicating the
     income and number of items sold under each category. Method of inventory
     valuation used shall also be disclosed along with computation of cost of
     goods sold.

-    Sales shall be shown gross and details of discount/rebate allowed and of
     sales returns shall be shown separately.

-    Income from interest and dividend shall be shown separately, without any
     related expenses being set-off against them on the income side of the P&L
     Account.

-    Increase/decrease of stock shall be shown separately.

-    Details of reversal of previous years' debits, if any, shall be shown
     component-wise, under the miscellaneous head (eg. Bad debts recovered etc.)

-    Item-wise details of income that has been set off against corresponding
     expenditure.

                                       45
<PAGE>
               PROFORMA FOR BANK GUARANTEE FOR FULFILLING NETWORK
                        ROLL-OUT OBLIGATION FOR PHASE I

To

The President of India
acting through Telegraph Authority

     In consideration of the President of India acting through Telegraph
Authority, Sanchar Bhavan, 20 Ashoka Road, New Delhi-110 001
(here                            (Name), Director inafter called the LICENSOR),
      --------------------------
having agreed to grant a LICENCE to M/s
                                        --------------------------------------
of                                                                (hereinafter
   --------------------------------------------------------------
called 'the LICENSEE') to establish, maintain and operate
                                                          --------------------
service (hereinafter called 'the SERVICE') as per LICENCE no.
                                                             -----------------
dated                  (hereinafter called 'the said LICENCE') on the terms and
      ----------------
conditions contained in the said LICENCE, which inter-alia provides for
production of a Bank Guarantee to the extent of Rs.100/- crores (Rupees one
hundred crores) for completion of phase I of the service by way of security for
the due observance and performance of the terms and conditions of clause 9.2 of
the said LICENCE. We                          (name and address and other
                     ------------------------
particulars of the Bank/ the IPFI as the case may be) (hereinafter referred to
as 'the Bank'/ `the IPFI') at the request of the LICENSEE hereby irrevocably and
unconditionally guarantee to the LICENSOR to ensure performance of all necessary
and efficient completion of phase - I of service which may be required to be
rendered by the LICENSEE in connection with and/or for the performance of the
said LICENCE and further guarantees that the SERVICE which shall be provided by
the LICENCE under the said LICENCE, shall be actually performed in accordance
with terms & conditions of the LICENCE to the satisfaction of the LICENSOR.

                                       46
<PAGE>
2.   We the bank/             (Name of the IPFI) hereby undertake to pay to the
                 -------------
LICENSOR an amount not exceeding Rs.
                                    -----------------------------------------
(Rupees                            only) against any loss or damage caused to
        ---------------------------
or suffered or would be caused to or suffered by the LICENSOR by reason of any
breach by the said LICENSEE of any of the terms and conditions contained in the
said LICENCE.

3.   We the bank/         (name of the IPFI) hereby, in pursuance of the terms
                 ---------
of the said LICENCE, absolutely, irrevocably and unconditionally guarantee as
primary obliger and not merely as surety for the payment of an amount of Rs 100
crores (Rupees One hundred crores only) to the LICENSOR to secure due and
faithful performance by the LICENSEE of all his/their obligations of Phase I
under the said LICENCE.

4.   We the bank/           (name of the IPFI) hereby also undertake to pay
                 -----------
the amounts due and payable under this guarantee without any demur, merely on a
demand without recourse to the LICENSEE .

5.   We, the bank/            (name of the IPFI) do hereby agree that the
                  ------------
decision of the LICENSOR as to whether the LICENSEE has failed to or neglected
to perform or discharge his duties and obligations as aforesaid and/or whether
the service is free from deficiencies and defects and is in accordance with or
not of the terms & conditions of the said LICENCE and as to the amount payable
to the LICENSOR by the Bank/            (name of the IPFI) hereunder shall be
                            ------------
final and binding on the Bank/           (name of the IPFI).
                              -----------

6.   WE, THE BANK/          (name of the IPFI), DO HEREBY DECLARE AND AGREE
                  ----------
that the

(a)  Guarantee herein contained shall remain in full force and effect for a
period of Two Years from the date hereof and that it shall continue to be
enforceable till all the dues of the LICENSOR and by virtue of the said LICENCE
have been fully paid and its claims satisfied or discharged or till LICENSOR
satisfies that the terms and conditions of the said LICENCE have been fully and
properly carried out by the said LICENSEE and accordingly discharged this
guarantee.

                                       47
<PAGE>
(b)  The LICENSOR shall have the fullest liberty without our consent and without
affecting in any manner our obligations hereunder to vary any of the terms and
conditions of the said LICENCE or to extend time of performance of any
obligations by the said LICENSEE from time to time or to postpone for any time
or from time to time any of the powers exercisable by the LICENSOR against the
said LICENSEE and to forbear or to enforce any of the terms and conditions
relating to the said LICENCE and we shall not be relieved from our liability by
reason of any variation or extension being granted to the said LICENSEE or
forbearance act or omission on the part of the LICENSOR or any indulgence by the
LICENSOR to the said LICENSEE or to give such matter or thing whatsoever which
under the law relating to sureties would but for this provision, have effect of
so relieving us.

(c)  Any claim which we have against the LICENSEE shall be subject and
subordinate to the prior payment and performance in full of all the obligations
of us hereunder and we will not without prior written consent of the LICENSOR
exercise any legal right or remedy of any kind in respect of any such payment or
performance so long as the obligations of us hereunder remains owing and
outstanding.

(d)  This Guarantee shall be irrevocable and the obligations of us herein shall
not be conditional of any prior notice by us or by the LICENSEE.

(e)  This Guarantee will continue to remain valid even if there is a change in
the constitution of us (the BANK/            (name of the IPFI)) or the
                                 ------------
LICENSEE.

7.   We the BANK/            (name of the IPFI) undertake not to revoke this
                 ------------
Guarantee during its currency except with the previous consent of the LICENSOR
in writing.

Dated                           day                                     for
      -------------------------     -----------------------------------

-----------------------------------------------------------------------------
(name of the Bank/             (name of the IPFI))
                  -------------

Witness:

1                                      2
  ------------------------------------   --------------------------------

                                       48
<PAGE>
            PROFORMA FOR BANK GUARANTEE FOR FULFILLING NETWORK ROLL-
                          OUT OBLIGATION FOR PHASE II

To

The President of India
acting through Telegraph Authority

In consideration of the President of India acting through Telegraph Authority,
Sanchar Bhavan, 20 Ashoka Road, New Delhi - 110 001 (hereinafter called the
LICENSOR), having agreed to grant a LICENCE to
M/s
    --------------------------------------------------------
of                                         hereinafter called `the LICENSEE') to
   ---------------------------------------
establish, maintain and operate                          service (hereinafter
                                ------------------------
called `the Service') as per LICENCE no                  dated
                                        ----------------       -----------------
(hereinafter called `the said LICENCE') on the terms and conditions contained in
the said LICENCE, which inter-alia provides for production of a Bank Guarantee
to the extent of Rs.100/- crores (Rupees one hundred crores) for completion of
phase II of the service by way of security for the due observance and
performance of the terms and conditions of clause 9.2 of the said LICENCE.
We                          (indicate the name and address and other particulars
   ------------------------
of the Bank/the IPFI as the case may be) (hereinafter referred to as `the
Bank'/the IPFI) at the request of the LICENSEE hereby irrevocably and
unconditionally guarantee to the LICENSOR to ensure performance of all necessary
and efficient completion of phase-II of service which may be required to be
rendered by the LICENSEE in connection with and/or for the performance of the
said LICENCE and further guarantees that the service which shall be provided by
the LICENSEE under the said LICENCE, shall be actually performed in accordance
with terms & conditions of the LICENCE to the satisfaction of the LICENSOR.

2. We the bank/                         (name of the IPFI) hereby undertake to
               ------------------------
pay to the LICENSOR an amount not exceeding Rs.
                                               ---------------------------

                                       49
<PAGE>
(Rupees                               only) against any loss or damage caused to
        ------------------------------
or suffered or would be caused to or suffered by the LICENSOR by reason of any
breach by the said LICENSEE of any of the terms and conditions contained in the
said LICENCE.

3. We the bank/             (name of the IPFI) hereby, in pursuance of the terms
               -------------
of the said LICENCE, absolutely, irrevocably and unconditionally guarantee as
primary obliger and not merely as surety for the payment of an amount of Rs.100
crores (Rupees One hundred crores only) to the LICENSOR to secure due and
faithful performance by the LICENSEE of all his/their obligations of Phase II
under the said LICENCE.

4. We the bank/              (name of the IPFI) hereby also undertake to pay the
               --------------
amounts due and payable under this guarantee without any demur, merely on a
demand without recourse to the LICENSEE.

5. We, the bank/           (name of the IPFI), do hereby agree that the decision
                ----------
of the LICENSOR as to whether the LICENSEE has failed to or neglected to perform
or discharge his duties and obligations as aforesaid and/or whether the service
is free from deficiencies and defects and is in accordance with or not of the
terms & conditions of the said LICENCE and as to the amount payable to the
LICENSOR by the Bank/           (name of the IPFI) hereunder shall be final and
                     -----------
binding on the Bank.

6. WE, THE BANK/            (name of the IPFI), DO HEREBY DECLARE AND AGREE that
                ------------
the

(a) Guarantee herein contained shall remain in full force and effect for a
period of Three Years from the date hereof and that it shall continue to be
enforceable till all the dues of the LICENSOR and by virtue of the said LICENCE
have been fully paid and its claims satisfied or discharged or till LICENSOR
satisfies that the terms and conditions of the said LICENCE have been fully and
properly carried out by the said LICENSEE and accordingly discharged this
guarantee.

                                       50
<PAGE>
(b) The LICENSOR shall have the fullest liberty without our consent and without
affecting in any manner our obligations hereunder to vary any of the terms and
conditions of the said LICENCE or to extend time of performance of any
obligations by the said LICENSEE from time to time or to postpone for any time
or from time to time any of the powers exercisable by the LICENSOR against the
said LICENSEE and to forbear or to enforce any of the terms and conditions
relating to the said LICENCE and we shall not be relieved from our liability by
reason of any variation or extension being granted to the said LICENSEE or
forbearance act or omission on the part of the LICENSOR or any indulgence by the
LICENSOR to the said LICENSEE or to give such matter or thing whatsoever which
under the law relating to sureties would but for this provision, have effect of
so relieving us.

(c) Any claim which we have against the LICENSEE shall be subject and
subordinate to the prior payment and performance in full of all the obligations
of us hereunder and we will not without prior written consent of the LICENSOR
exercise any legal right or remedy of any kind in respect of any such payment or
performance so long as the obligations of us hereunder remains owing and
outstanding.

(d) This Guarantee shall be irrevocable and the obligations of us
herein shall not be conditional of any prior notice by us or by the LICENSEE.

(e) This Guarantee will continue to remain valid even if there is a change in
the constitution of us (the BANK/                (name of the IPFI)) or the
                                 ----------------
LICENSEE.

7. We the BANK/               (name of the IPFI) undertake not to revoke this
               ---------------
Guarantee during its currency except with the previous consent of the LICENSOR
in writing.

Dated                                    day                                for
      ----------------------------------     ------------------------------

--------------------------------------------------------------------------------
                               (name of the Bank/            (name of the IPFI))
                                                 ------------

Witness:

1                                           2
  -----------------------------------------   ----------------------------------

                                       51
<PAGE>

            PROFORMA FOR BANK GUARANTEE FOR FULFILLING NETWORK ROLL-
                          OUT OBLIGATION FOR PHASE III

To

The President of India
acting through Telegraph Authority

In consideration of the President of India acting through Telegraph Authority,
Sanchar Bhavan, 20 Ashoka Road, New Delhi - 110 001 (hereinafter called the
LICENSOR), having agreed to grant a LICENCE to M/s
                                                  ------------------------------
of                             (hereinafter called `the LICENSEE') to establish,
  -----------------------------
maintain and operate                                       service (hereinafter
                     -------------------------------------
called `the Service') as per LICENCE no
                                        ----------------------------
dated                  (hereinafter called `the said LICENCE') on the terms and
     -----------------
conditions contained in the said LICENCE, which inter-alia provides for
production of a Bank Guarantee to the extent of Rs.   100/- crores (Rupees one
                                                   ---
hundred crores) for completion of phase III of the service by way of security
for the due observance and performance of the terms and conditions of clause 9.2
of the said LICENCE. We                          (indicate the name and address
                       --------------------------
and other particulars of the Bank/the IPFI as the case may be (hereinafter
referred to as `the Bank'/the IPFI) at the request of the LICENSEE hereby
irrevocably and unconditionally guarantee to the LICENSOR to ensure performance
of all necessary and efficient

                                       52
<PAGE>
completion of phase-III of service which may be required to be rendered by the
LICENSEE in connection with and/or for the performance of the said LICENCE and
further guarantees that the service which shall be provided by the LICENSEE
under the said LICENCE, shall be actually performed in accordance with terms &
conditions of the LICENCE to the satisfaction of the LICENSOR.

2. We the bank/              (name of the IPFI) hereby undertake to pay to the
               -------------
LICENSOR an amount not exceeding Rs.
                                    -------------------------------
(Rupees                             only) against any loss or damage caused to
       -----------------------------
or suffered or would be caused to or suffered by the LICENSOR by reason of any
breach by the said LICENSEE of any of the terms and conditions contained in the
said LICENCE.

3. We the bank/            (name of the IPFI) hereby, in pursuance of the terms
               ------------
of the said LICENCE, absolutely, irrevocably and unconditionally guarantee as
primary obliger and not merely as surety for the payment of an amount of Rs.100
crores (Rupees One hundred crores only) to the LICENSOR to secure due and
faithful performance by the LICENSEE of all his/their obligations of Phase III
under the said LICENCE.

4. We the bank/             (name of the IPFI)hereby also undertake to pay the
               ------------
amounts due and payable under this guarantee without any demur, merely on a
demand without recourse to the LICENSEE.

5. We, the bank/           (name of the IPFI), do hereby agree that the decision
                -----------
of the LICENSOR as to whether the LICENSEE has failed to or neglected to perform
or discharge his duties and obligations as aforesaid and/or whether the service
is free from deficiencies and defects and is in accordance with or not of the
terms & conditions of the said LICENCE and as to the amount payable to the
LICENSOR by the Bank/           (name of the IPFI) hereunder shall be final and
                     -----------
binding on the Bank/                  (name of the IPFI).
                    -----------------

6. WE, THE BANK/            (name of the IPFI), DO HEREBY DECLARE AND AGREE that
                ------------
the

                                       53
<PAGE>
(a) Guarantee herein contained shall remain in full force and effect for a
period of Four Years from the date hereof and that it shall continue to be
enforceable till all the dues of the LICENSOR and by virtue of the said LICENCE
have been fully paid and its claims satisfied or discharged or till LICENSOR
satisfies that the terms and conditions of the said LICENCE have been fully and
properly carried out by the said LICENSEE and accordingly discharged this
guarantee.

(b) The LICENSOR shall have the fullest liberty without our consent and without
affecting in any manner our obligations hereunder to vary any of the terms and
conditions of the said LICENCE or to extend time of performance of any
obligations by the said LICENSEE from time to time or to postpone for any time
or from time to time any of the powers exercisable by the LICENSOR against the
said LICENSEE and to forbear or to enforce any of the terms and conditions
relating to the said LICENCE and we shall not be relieved from our liability by
reason of any variation or extension being granted to the said LICENSEE or
forbearance act or omission on the part of the LICENSOR or any indulgence by the
LICENSOR to the said LICENSEE or to give such matter or thing whatsoever which
under the law relating to sureties would but for this provision, have effect of
so relieving us.

(c) Any claim which we have against the LICENSEE shall be subject and
subordinate to the prior payment and performance in full of all the obligations
of us hereunder and we will not without prior written consent of the LICENSOR
exercise any legal right or remedy of any kind in respect of any such payment or
performance so long as the obligations of us hereunder remains owing and
outstanding.

(d) This Guarantee shall be irrevocable and the obligations of us herein shall
not be conditional of any prior notice by us or by the LICENSEE.

(e) This Guarantee will continue to remain valid even if there is a change in
the constitution of us (the BANK/               (name of the IPFI)) or the
                                 ---------------
LICENSEE.

7. We the BANK/                  (name of the IPFI) undertake not to revoke
               -----------------
this Guarantee during its currency except with the previous consent of the
LICENSOR in writing.

Dated                           day                                      for
     ---------------------------   -------------------------------------

-------------------------------------------------------------------------------
                                                     (name of the Bank/the IPFI)

Witness:

1                                          2
  ----------------------------------------   -----------------------------------

                                       54
<PAGE>

            PROFORMA FOR BANK GUARANTEE FOR FULFILLING NETWORK ROLL-
                          OUT OBLIGATION FOR PHASE IV

To

The President of India
acting through Telegraph Authority

In consideration of the President of India acting through Telegraph Authority,
Sanchar Bhavan, 20 Ashoka Road, New Delhi - 110 001 (hereinafter called the
LICENSOR), having agreed to grant a LICENCE to M/s
                                                  ------------------------------
of                           (hereinafter called `the LICENSEE') to establish,
  --------------------------
maintain and operate                                       service (hereinafter
                    --------------------------------------
called `the Service') as per LICENCE no
                                       ----------------------
dated                 (hereinafter called `the said LICENCE') on the terms and
     -----------------
conditions contained in the said LICENCE, which inter-alia provides for
production of a Bank Guarantee to the extent of Rs.   100/- crores (Rupees one
                                                   ---
hundred crores) for completion of phase IV of the service by way of security
for the due observance and performance of the terms and conditions of clause 9.2
of the said LICENCE. We                          (indicate the name and address
                       --------------------------
and other particulars of the Bank/IPFI as the case may be) (hereinafter referred
to as `the Bank'/the IPFI) at the request of the LICENSEE hereby irrevocably
and unconditionally guarantee to the LICENSOR to ensure performance of all
necessary and efficient completion of phase-IV of service which may be required
to be rendered by the LICENSEE in connection with and/or for the performance of
the said LICENCE and further guarantees that the service which shall be provided
by the LICENSEE under the said LICENCE, shall be actually performed in
accordance with terms & conditions of the LICENCE to the satisfaction of the
LICENSOR.

2. We the bank/               (name of the IPFI) hereby undertake to pay to the
               ---------------
LICENSOR an amount not exceeding Rs.
                                     ------------------------------
(Rupees                              only) against any loss or damage caused to
       ------------------------------
or suffered or would be caused to or suffered by the LICENSOR by reason of any
breach by the said LICENSEE of any of the terms and conditions contained in the
said LICENCE.

3. We the bank/            (name of the IPFI) hereby, in pursuance of the terms
               ------------
of the said LICENCE, absolutely, irrevocably and unconditionally guarantee as
primary obliger and not merely as surety for the payment of an amount of Rs.100
crores (Rupees One hundred crores only) to the LICENSOR to secure due and
faithful performance by the LICENSEE of all his/their obligations of Phase IV
under the said LICENCE.

4. We the bank/             (name of the IPFI) hereby also undertake to pay the
               -------------
amounts due and payable under this guarantee without any demur, merely on a
demand without recourse to the LICENSEE.

                                       55
<PAGE>
5. We, the bank/            (name of the IPFI), do hereby agree that the
                ------------
decision of the LICENSOR as to whether the LICENSEE has failed to or neglected
to performor discharge his duties and obligations as aforesaid and/or whether
the service is free from deficiencies and defects and is in accordance with or
not of the terms & conditions of the said LICENCE and as to the amount payable
to the LICENSOR by the Bank/            (name of the IPFI) hereunder shall be
                            ------------
final and binding on the Bank/               (name of the IPFI).
                              ---------------

6. WE, THE BANK/                (Name of the IPFI), DO HEREBY DECLARE AND AGREE
                ----------------
that the

(a) Guarantee herein contained shall remain in full force and effect for a
period of Seven Years from the date hereof and that it shall continue to be
enforceable till all the dues of the LICENSOR and by virtue of the said LICENCE
have been fully paid and its claims satisfied or discharged or till LICENSOR
satisfies that the terms and conditions of the said LICENCE have been fully and
properly carried out by the said LICENSEE and accordingly discharged this
guarantee.

(b) The LICENSOR shall have the fullest liberty without our consent and without
affecting in any manner our obligations hereunder to vary any of the terms and
conditions of the said LICENCE or to extend time of performance of any
obligations by the said LICENSEE from time to time or to postpone for any time
or from time to time any of the powers exercisable by the LICENSOR against the
said LICENSEE and to forbear or to enforce any of the terms and conditions
relating to the said LICENCE and we shall not be relieved from our liability by
reason of any variation or extension being granted to the said LICENSEE or
forbearance act or omission on the part of the LICENSOR or any indulgence by the
LICENSOR to the said LICENSEE or to give such matter or thing whatsoever which
under the law relating to sureties would but for this provision, have effect of
so relieving us.

(c) Any claim which we have against the LICENSEE shall be subject and
subordinate to the prior payment and performance in full of all the obligations
of us hereunder and we will not without prior written consent of the LICENSOR

                                       56
<PAGE>
exercise any legal right or remedy of any kind in respect of any such payment or
performance so long as the obligations of us hereunder remains owing and
outstanding.

(d) This Guarantee shall be irrevocable and the obligations of us
herein shall not be conditional of any prior notice by us or by the LICENSEE.

(e) This Guarantee will continue to remain valid even if there is a change in
the constitution of us (the BANK/                   (name of the IPFI)) or the
                                 -------------------
LICENSEE.

7. We the BANK/                (name of the IPFI) undertake not to revoke this
               ----------------
Guarantee during its currency except with the previous consent of the LICENSOR
in writing.

Dated                                day                                   for
      ------------------------------      --------------------------------

-------------------------------------------------------------------------------
                                                     (name of the Bank/the IPFI)

Witness:

1                                            2
  -----------------------------------------    ---------------------------------

                                       57
<PAGE>

                     PROFORMA FOR FINANCIAL BANK GUARANTEE

To
     The President of India
     Acting through Telegraph Authority

     In consideration of the President of India acting through Telegraph
Authority, Sanchar Bhavan, 20 Ashoka Road, New Delhi - 110 001 (hereinafter
called the LICENSOR), having agreed to grant a LICENCE to M/s
                                                             -------------------
of                            (hereinafter called `the LICENSEE') to establish,
   --------------------------
maintain and operate National Long Distance Service (hereinafter called the
SERVICE) in accordance with the LICENCE No.                       dated
                                            ---------------------       --------
(hereinafter called `the LICENCE') on the terms and conditions contained in the
said LICENCE which interalia provides for production of a Bank Guarantee to the
extent of Rs. (          in words) under the said LICENCE by way of security for
               ---------
payment of the said LICENCE fee as well as such other fees/dues or charges
required to be paid by the LICENSEE under the LICENCE, We
                                                          ----------------------
(indicate the name and address and other particulars of the Bank/the IPFI as the
case may be) (hereinafter referred to as `the Bank/the IPFI') at the request
of the LICENSEE hereby irrevocably and unconditionally guarantee to the
             LICENSOR of all payments payable by the LICENSEE under the LICENCE,
------------
including but not limited to, the LICENCE fee and other charges.

2.   We, the Bank/            (name of the IPFI), hereby undertake to pay to the
                  -----------
                                                    LICENSOR an amount not
---------------------------------------------------
exceeding Rs.               (Rupees                   only) against any loss or
              -------------         -----------------
damage caused to or suffered or would be caused to or suffered by the LICENSOR
by reason of any failure of the LICENSEE to pay all the above

                                       58
<PAGE>
mentioned fees, dues and charges or any part thereof within the periods
stipulated in the LICENCE or failure of the LICENSEE to keep renewed and alive
this bank guarantee till the determination of the LICENSEE by efflux of time.

3.   We, the Bank/             (name of the IPFI), hereby further undertake to
                  ------------
pay as primary obliger and not merely as surety to pay such sum not exceeding
Rs.                 (Rupees                 only) to the LICENSOR immediately on
    ---------------         ---------------
demand and without demur.

4.   WE, THE BANK/             (name of the IPFI), DO HEREBY DELCARE AND AGREE
                  ------------
that the decision of the LICENSOR as to whether LICENSEE has failed to pay the
said LICENCE fees or any other fees or charge or any part thereof payable under
the said LICENCE or failed to renew the bank guarantee and as to the amount
payable to the LICENSOR by the Bank/             (name of the IPFI) hereunder
                                    ------------
shall be final and binding on us.

5.   WE, THE BANK/             (name of the IPFI), DO HEREBY DELARE AND AGREE
                  ------------
that the

(a)  Guarantee herein contained shall remain in full force and effect for a
period of six months from the date hereof and that it shall continue to be
enforceable till all the dues of the LICENSOR and by virtue of the said LICENCE
have been fully paid and its claims satisfied or discharged or till LICENSOR
satisfies that the terms and conditions of the said LICENCE have been fully and
properly carried out by the said LICENSEE and accordingly discharged this
guarantee.

(b)  The LICENSOR shall have the fullest liberty without our consent and without
affecting in any manner our obligations hereunder to vary any of the terms and
conditions of the said LICENSEE or to extend time of performance of any
obligations by the said LICENSEE from time to time or to postpone for any

                                       59
<PAGE>

time or from time to time any of the powers exercisable by the LICENSOR against
the said LICENSEE and to forebear or to enforce any of the terms and conditions
relating to the said LICENCE and we shall not be relieved from our liability by
reason of any forbearance act or omission on the part of the LICENSOR or any
indulgence by the LICENSOR to the said LICENSEE or to give such matter or thing
whatsoever which under the law relating to sureties would but for this
provision, have effect of so relieving us.

(c)  Any claim which we have against the LICENSEE shall be subject and
subordinate to the prior payment and performance in full of the obligations of
us hereunder and we will not without prior written consent of the LICENSOR
exercise any legal right or remedy of any kind in respect of any such payment or
performance so long as the obligations of us hereunder remains owing and
outstanding.

(d)  This Guarantee shall be irrevocable and the obligations of us herein shall
not be conditional of any prior notice by us or by the LICENSEE.

(e)  This Guarantee will continue to remain valid even if there is a change in
the constitution of us (the BANK/             (name of the IPFI)) or the
                                 ------------
LICENSEE.

6.   We the BANK/             (name of the IPFI) undertake not to revoke this
                 ------------
Guarantee during its currency except with the previous consent of the LICENSOR
in writing.

Dated                 day
      ---------------     ---------------

for
    -----------------
                                                     (name of the Bank)

Witness:

1                                        2
 ---------------------------------------- --------------------------------------

                                       60
<PAGE>
                      PROFORMA FOR FINANCIAL BANK GUARANTEE
                             (FOR WPC FEE/ROYALITY)

To
     The President of India
     Acting through Telegraph Authority

     In consideration of the President of India acting through Telegraph
Authority, Sanchar Bhavan, 20 Ashoka Road, New Delhi - 110 001 (hereinafter
called the LICENSOR), having agreed to grant a LICENCE to M/s
                                                              ------------------
of                           (hereinafter called `the LICENSEE') to establish,
   -------------------------

maintain and operate National Long Distance Service (hereinafter called the
SERVICE) in accordance with the LICENCE No.
                                            ------------------------------------
dated            (hereinafter called `the LICENCE') on the terms and conditions
      ----------
contained in the said LICENCE which interalia provides for production of a Bank
Guarantee to the extent of Rs. (           in words) under the said LICENCE by
                                ----------
way of security for payment of the said fee/royalty for the use of spectrum
and possession of wireless telegraphy equipment payable by the LICENSEE under
the LICENCE, We                    (indicate the name and address and other
                ------------------
particulars of the Bank/the IPFI as the case may be) (hereinafter referred to
as `the Bank'/the IPFI) at the request of the LICENSEE hereby irrevocably and
unconditionally guarantee to the             LICENSOR of all payments payable by
                                 -----------
the LICENSEE under the LICENCE, including but not limited to, the fee/royalty
for the use of spectrum and possession of wireless telegraphy equipment.

2.   We, the Bank/             (name of the IPFI), hereby undertake to pay to
                  ------------
the               LICENSOR an amount not exceeding Rs.                (Rupees
    -------------                                      --------------
               only) against any loss or damage caused to or suffered or would
--------------
be caused to or suffered by the

                                       61
<PAGE>

LICENSOR by reason of any failure of the LICENSEE to pay all the above mentioned
fees, dues and charges or any part thereof within the periods stipulated in the
LICENCE.

3.   We, the Bank/             (name of the IPFI), hereby further undertake to
                  ------------
pay as primary obliger and not merely as surety to pay such sum not exceeding
Rs.                (Rupees                 only) to the LICENSOR immediately on
    --------------         ---------------
demand and without demur.

4.   WE, THE BANK/             (name of the IPFI), DO HEREBY DELCARE AND AGREE
                  ------------
that the decision of the LICENSOR as to whether LICENSEE has failed to pay the
said fee/royalty or any part thereof payable under the said LICENCE and as to
the amount payable to the LICENSOR by the Bank/             (name of the IPFI)
                                               ------------
hereunder shall be final and binding on us.

5.   WE, THE BANK/             (name of the IPFI), DO HEREBY DELARE AND AGREE
                  ------------
that the

(a)  Guarantee herein contained shall remain in full force and effect for a
period of six months from the date hereof and that it shall continue to be
enforceable till all the dues of the LICENSOR and by virtue of the said LICENCE
have been fully paid and its claims satisfied or discharged or till LICENSOR
satisfies that the terms and conditions of the said LICENCE have been fully and
properly carried out by the said LICENSEE and accordingly discharged this
guarantee.

(b)  The LICENSOR shall have the fullest liberty without our consent and without
affecting in any manner our obligations hereunder to vary any of the terms and
conditions of the said LICENSEE or to extend time of performance of any
obligations by the said LICENSEE from time to time or to postpone for any time
or from time to time any of the powers exercisable by the LICENSOR

                                       62
<PAGE>
against the said LICENSEE and to forebear or to enforce any of the terms and
conditions relating to the said LICENCE and we shall not be relieved from our
liability by reason of any forbearance act or omission on the part of the
LICENSOR or any indulgence by the LICENSOR to the said LICENSEE or to give such
matter or thing whatsoever which under the law relating to sureties would but
for this provision, have effect of so relieving us.

(c)  Any claim which we have against the LICENSEE shall be subject and
subordinate to the prior payment and performance in full of the obligations of
us hereunder and we will not without prior written consent of the LICENSOR
exercise any legal right or remedy of any kind in respect of any such payment or
performance so long as the obligations of us hereunder remains owing and
outstanding.

(d)  This Guarantee shall be irrevocable and the obligations of us herein shall
not  be conditional of any prior notice by us or by the LICENSEE.

(e)  This Guarantee will continue to remain valid even if there is a change in
the constitution of us (the BANK/             (name of the IPFI)) or the
                                 ------------
LICENSEE.

6.   We the BANK/             (name of the IPFI) undertake not to revoke this
                 ------------
Guarantee during its currency except with the previous consent of the LICENSOR
in writing.

Dated                day
      --------------     ------------
for
    -------------------
                                                (name of the Bank/
                                                                  --------------
                                                (name of the IPFI))

Witness:

1                                        2
 ---------------------------------------- --------------------------------------

                                       63
<PAGE>
                           FILE. NO. 10-50/2001-BS-I
                           MINISTRY OF COMMUNICATIONS
                        DEPARTMENT OF TELECOMMUNICATIONS
                         SANCHAR BHAVAN, 20-ASHOKA ROAD
                              NEW DELHI - 110 001

                                                                 DATE 29.01.2002
TO

VIDESH SANCHAR NIGAM LIMITED,
VIDESH SANCHAR BHAVAN,
MG ROAD, FORT
MUMBAI - 400001.

                      (ATTN. SHRI G. PALANIAPPAN, SR. G.M.)

SUBJECT: LETTER OF INTENT (LOI) FOR AWARD OF LICENCE FOR NLD SERVICE -- SIGNING
         OF LICENCE REGARDING.

SIR,

     WITH REFERENCE TO YOUR LETTER NO. VND/NLD/2002 DATED 30-01-2002 ON THE
ABOVE SUBJECT, IT IS INFORMED THAT THE SPECIAL CONDITION OFFERED TO VSNL TO
COMPENSATE THE LIKELY LOSSES IN LIEU OF PREPONMENT OF DEMONOPOLISATION HAS BEEN
INCORPORATED IN THE LICENCE AGREEMENT FOR NLD SERVICE AT PARA - 5.3. A COPY OF
THE LICENCE AGREEMENT IS ENCLOSED.

                                                                            SD/-
                                                                   (M.S. SHAMSI)
                                                          SECTION OFFICER (BS-I)
                                                                    TEL: 3036135
                                                                         3036109

                                       64
<PAGE>
1ST YEAR COVERAGE

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
S.N.         YEAR-1                               CIRCLE
--------------------------------------------------------------------------------
<S>          <C>                                  <C>
1            Chennai                              CHENNAI
--------------------------------------------------------------------------------
2            Delhi                                DELHI
--------------------------------------------------------------------------------
3            Ahmedabad                            GUJARAT
-------------------------------------------------
4            Nadia
--------------------------------------------------------------------------------
5            Ambala
-------------------------------------------------
6            Gurgaon                              HARYANA
-------------------------------------------------
7            Karnal
--------------------------------------------------------------------------------
8            Bangalore                            KARNATAKA
--------------------------------------------------------------------------------
9            Ernakulam
-------------------------------------------------
10           Thrissur
-------------------------------------------------
11           Kottayam
-------------------------------------------------
12           Quilon                               KERALA
-------------------------------------------------
13           Allepy
-------------------------------------------------
14           Palaghat
-------------------------------------------------
15           Trivendrum
--------------------------------------------------------------------------------
16           Mumbai
-------------------------------------------------
17           Nagpur
------------------------------------------------- MAHARASHTRA
18           Pune
-------------------------------------------------
19           Kalyan
--------------------------------------------------------------------------------
20           Jallandhur
-------------------------------------------------
21           Chandigarh                           PUNJAB
-------------------------------------------------
22           Amritsar
--------------------------------------------------------------------------------
23           Coimbatore
-------------------------------------------------
24           Salem
-------------------------------------------------
25           Trichy
-------------------------------------------------
26           Erode                                TAMIL NADU
-------------------------------------------------
27           Thanhavur
-------------------------------------------------
28           Vellore
-------------------------------------------------
29           Madurai
--------------------------------------------------------------------------------
30           Lucknow
-------------------------------------------------
31           Ghaziabad
------------------------------------------------- UP
32           Khanpur
--------------------------------------------------------------------------------
</TABLE>

                                       65
<PAGE>
2ND YEAR COVERAGE

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
S.N.         YEAR-2                               CIRCLE
--------------------------------------------------------------------------------
<S>          <C>                                  <C>
1            Hyderabad
------------------------------------------------- AP
2            Guntur
--------------------------------------------------------------------------------
3            Patna                                BIHAR
--------------------------------------------------------------------------------
4            Mehsana
-------------------------------------------------
5            Valsad                               GUJARAT
-------------------------------------------------
6            Vododra
--------------------------------------------------------------------------------
7            Rohtak                               HARYANA
--------------------------------------------------------------------------------
8            Tiruvalla                            KERALA
-------------------------------------------------
9            Calicut
--------------------------------------------------------------------------------
10           Kolhapur                             MAHARASHTRA
-------------------------------------------------
11           Satara
--------------------------------------------------------------------------------
12           Bhopal
-------------------------------------------------
13           Indore                               MP
-------------------------------------------------
14           Morena
--------------------------------------------------------------------------------
15           Jaipur
------------------------------------------------- RAJASTHAN
16           Udaipur
--------------------------------------------------------------------------------
17           Agra                                 UP
--------------------------------------------------------------------------------
</TABLE>

3RD YEAR COVERAGE

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
S.N.         YEAR-3                               CIRCLE
--------------------------------------------------------------------------------
<S>          <C>                                  <C>
1            Rajamundari
-------------------------------------------------
2            Ekuru
-------------------------------------------------
3            Krishna
-------------------------------------------------
4            Vishakapatnam
-------------------------------------------------
5            Vizianagaram
-------------------------------------------------
6            Anantpur
-------------------------------------------------
7            Kurnool                              AP
-------------------------------------------------
8            Nellore
-------------------------------------------------
9            Nalgonda
-------------------------------------------------
10           Mehboobnagar
-------------------------------------------------
11           Medak
-------------------------------------------------
12           Nizambad
-------------------------------------------------
13           Prakasham
-------------------------------------------------
14           Adilabad
-------------------------------------------------
15           Srikakulam
--------------------------------------------------------------------------------
16           Dhambad                              BIHAR
-------------------------------------------------
</TABLE>

                                       66

<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
S.N.         YEAR-3                               CIRCLE
--------------------------------------------------------------------------------
<S>          <C>                                  <C>
17           Arrah
--------------------------------------------------------------------------------
18           Junagarh
-------------------------------------------------
19           Bhavnagar
-------------------------------------------------
20           Bharuch
-------------------------------------------------
21           Jamnagar                             GUJARAT
-------------------------------------------------
22           Godhra
-------------------------------------------------
23           Rajkor
-------------------------------------------------
24           Surat
-------------------------------------------------
25           Amreli
--------------------------------------------------------------------------------
26           Hisar                                HARYANA
-------------------------------------------------
27           Sonapat
--------------------------------------------------------------------------------
28           Mangalore
-------------------------------------------------
29           Belgaum                              KARNATAKA
-------------------------------------------------
30           Mysore
-------------------------------------------------
31           Mandya
--------------------------------------------------------------------------------
32           Ahmednagar
-------------------------------------------------
33           Panaji
-------------------------------------------------
34           Solapur                              MAHARASHTRA
-------------------------------------------------
35           Aurangabad
-------------------------------------------------
36           Sangli
-------------------------------------------------
37           Nasik
--------------------------------------------------------------------------------
38           Ujjain
-------------------------------------------------
39           Ratlam
-------------------------------------------------
40           Itarsi
-------------------------------------------------
41           Gwalior                              MP
-------------------------------------------------
42           Dewas
-------------------------------------------------
43           Guna
-------------------------------------------------
44           Betul
-------------------------------------------------
45           Shivpuri
-------------------------------------------------
46           Jhabua
--------------------------------------------------------------------------------
47           Cuttack
-------------------------------------------------
48           Behrampur
------------------------------------------------- ORISSA
49           Belasore
-------------------------------------------------
50           Baripada
--------------------------------------------------------------------------------
51           Ferozpur
-------------------------------------------------
52           Ludhiana
------------------------------------------------- PUNJAB
53           Patiala
-------------------------------------------------
54           Bhatinda
--------------------------------------------------------------------------------
55           Ajmer                                RAJASTHAN
--------------------------------------------------------------------------------
56           Ririunelvelli
-------------------------------------------------
57           Cuddalore
-------------------------------------------------
58           Kancheepuram                         TN
-------------------------------------------------
59           Nagarcoil
-------------------------------------------------
60           Virudhanagar
-------------------------------------------------
61           Pondicherry
-------------------------------------------------
</TABLE>

                                       67

<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
S.N.         YEAR-3                               CIRCLE
--------------------------------------------------------------------------------
<S>          <C>                                  <C>
62           Dharmapuri
--------------------------------------------------------------------------------
63           Meerut
-------------------------------------------------
64           Saharanpur
-------------------------------------------------
65           Allahabad
-------------------------------------------------
66           Dehradun
-------------------------------------------------
67           Varansai
-------------------------------------------------
68           Muradabad
-------------------------------------------------
69           Muzafarnagar                         UP
-------------------------------------------------
70           Bareilly
-------------------------------------------------
71           Mathura
-------------------------------------------------
72           Rampur
-------------------------------------------------
73           Sitapur
-------------------------------------------------
74           Unnao
-------------------------------------------------
75           Fathehpur
-------------------------------------------------
76           Shahjahanpur
--------------------------------------------------------------------------------
77           Calcutta
-------------------------------------------------
78           Asansole                             WB
-------------------------------------------------
79           Kharagpur
--------------------------------------------------------------------------------
</TABLE>

4TH YEAR COVERAGE

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
S.N.         YEAR-4                               CIRCLE
--------------------------------------------------------------------------------
<S>          <C>                                  <C>
1            Guwahati                             ASSAM
--------------------------------------------------------------------------------
2            Bhuj
-------------------------------------------------
3            Himmatnagar
------------------------------------------------- GUJRAT
4            Palanpur
-------------------------------------------------
5            Surendranagar
--------------------------------------------------------------------------------
6            Jind                                 HARYANA
-------------------------------------------------
7            Narnaul
--------------------------------------------------------------------------------
8            Shimla                               HP
--------------------------------------------------------------------------------
9            Hubli
-------------------------------------------------
10           Bijapur
-------------------------------------------------
11           Shimoga
-------------------------------------------------
12           Davangere
-------------------------------------------------
13           Kolar
-------------------------------------------------
14           Tumkur                               KARNATAKA
-------------------------------------------------
15           Hassan
-------------------------------------------------
16           Karwar
-------------------------------------------------
17           Gulbarga
-------------------------------------------------
18           Raichur
-------------------------------------------------
19           Chikmagalur
--------------------------------------------------------------------------------
</TABLE>

                                       68

<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
S.N.         YEAR-4                               CIRCLE
--------------------------------------------------------------------------------
<S>          <C>                                  <C>
20           Kannur                               KERALA
--------------------------------------------------------------------------------
21           Raigarh
-------------------------------------------------
22           Amravati
-------------------------------------------------
23           Raigarh
-------------------------------------------------
24           Ratnagiri
-------------------------------------------------
25           Akola
-------------------------------------------------
26           Latur
-------------------------------------------------
27           Chandrapur
-------------------------------------------------
28           Dhule
-------------------------------------------------
29           Nanded
-------------------------------------------------
30           Bhandara                             MAHARASHTRA
-------------------------------------------------
31           Buldana
-------------------------------------------------
32           Parbhani
-------------------------------------------------
33           Wardha
-------------------------------------------------
34           Yeotmal
-------------------------------------------------
35           Bhir
-------------------------------------------------
36           Jaina
-------------------------------------------------
37           Osmanabad
-------------------------------------------------
38           Gadchiroli
-------------------------------------------------
39           Kudal
--------------------------------------------------------------------------------
40           Raipur
-------------------------------------------------
41           Jabalpur
-------------------------------------------------
42           Bilaspur
-------------------------------------------------
43           Durg
-------------------------------------------------
44           Mandsaur
-------------------------------------------------
45           Khargone
-------------------------------------------------
46           Khandwa
-------------------------------------------------
47           Sagar
-------------------------------------------------
48           Dhar
-------------------------------------------------
49           Chhindwara
-------------------------------------------------
50           Satna                                MP
-------------------------------------------------
51           Shajapur
-------------------------------------------------
52           Chhatarpur
-------------------------------------------------
53           Vidisha
-------------------------------------------------
54           Jagdalpur
-------------------------------------------------
55           Rewa
-------------------------------------------------
56           Raigarh
-------------------------------------------------
57           Balaghat
-------------------------------------------------
58           Narsinghpur
-------------------------------------------------
59           Rajgarh
-------------------------------------------------
60           Shahdol
-------------------------------------------------
61           Ambikaopur
-------------------------------------------------
62           Raisen
-------------------------------------------------
63           Seoni
-------------------------------------------------
64           Damoh
-------------------------------------------------
</TABLE>

                                       69

<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
S.N.         YEAR-4                               CIRCLE
--------------------------------------------------------------------------------
<S>          <C>                                  <C>
65           Mandla
-------------------------------------------------
66           Sidhi
-------------------------------------------------
67           Panna
--------------------------------------------------------------------------------
68           Bhubhaneshwar
-------------------------------------------------
69           Sambalpur
-------------------------------------------------
70           Rourkela
-------------------------------------------------
71           Dhenkanala                           ORISSA
-------------------------------------------------
72           Koraput
-------------------------------------------------
73           Bolangir
-------------------------------------------------
74           Bhawanipatna
-------------------------------------------------
75           Phulbani
--------------------------------------------------------------------------------
76           Hosiarpur
-------------------------------------------------
77           Sangrur
------------------------------------------------- PUNJAB
78           Ropar
-------------------------------------------------
79           Pathankit
--------------------------------------------------------------------------------
80           Jodhpur
-------------------------------------------------
81           Alwar
-------------------------------------------------
82           Kota
-------------------------------------------------
83           Pall
-------------------------------------------------
84           Bikaner
-------------------------------------------------
85           Sikar
-------------------------------------------------
86           Bhikwara
-------------------------------------------------
87           Nagapiur
-------------------------------------------------
88           Shunshunu                            RAJASHTHAN
-------------------------------------------------
89           Barmer
-------------------------------------------------
90           Churu
-------------------------------------------------
91           Banswara
-------------------------------------------------
92           Chittorgarh
-------------------------------------------------
93           Sawaimadhopur
-------------------------------------------------
94           Sirohi
-------------------------------------------------
95           Tonk
-------------------------------------------------
96           Bundi
-------------------------------------------------
97           Jhalawar
-------------------------------------------------
98           Jaisalmer
--------------------------------------------------------------------------------
99           Tuticorin
------------------------------------------------- TN
100          Karaikudi
--------------------------------------------------------------------------------
101          Jalpaiguri
------------------------------------------------- WB
102          Puruliya
--------------------------------------------------------------------------------
103          Ranchi
-------------------------------------------------
104          Jamshedpur
-------------------------------------------------
105          Muzaffarpur
-------------------------------------------------
106          Darbhaga                             BIHAR
-------------------------------------------------
107          Gaya
-------------------------------------------------
108          Hazaribagh
-------------------------------------------------
109          Motihari
--------------------------------------------------------------------------------
</TABLE>

                                       70
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
S.N.         YEAR-4                               CIRCLE
--------------------------------------------------------------------------------
<S>          <C>                                  <C>
110          Dhhapra
-------------------------------------------------
111          Katihar
-------------------------------------------------
112          Bhagalpur
-------------------------------------------------
113          Saharsa
-------------------------------------------------
114          Sasaram
-------------------------------------------------
115          Deoghar
-------------------------------------------------
116          Munger
-------------------------------------------------
117          Daltongunj
--------------------------------------------------------------------------------
118          Deoria
-------------------------------------------------
119          Etawah
-------------------------------------------------
120          Barabanki
-------------------------------------------------
121          Etah
-------------------------------------------------
122          Gonda
-------------------------------------------------
123          Jaunpur
-------------------------------------------------
124          Basti
-------------------------------------------------
125          Mainouri                             UP
-------------------------------------------------
126          Ghazipur
-------------------------------------------------
127          Orai
-------------------------------------------------
128          Pratapgarh
-------------------------------------------------
129          Badaun
-------------------------------------------------
130          Haldwani
-------------------------------------------------
131          Pilibhit
-------------------------------------------------
132          Hamirpur
--------------------------------------------------------------------------------
</TABLE>

                                       71

<PAGE>
6TH YEAR COVERAGE

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
S.N.            YEAR-6                            CIRCLE
-------------------------------------------------------------------------------
<S>             <C>                               <C>
1               Tirupati
-------------------------------------------------
2               Khammam
-------------------------------------------------
3               Warangal                          AP
-------------------------------------------------
4               Karimnagar
-------------------------------------------------
5               Cuddapah
-------------------------------------------------------------------------------
6               Bellary
-------------------------------------------------
7               Merchara                          KARNATAKA
-------------------------------------------------
8               Bidar
-------------------------------------------------------------------------------
9               Jalgaon                           MAHARASHTRA
-------------------------------------------------------------------------------
10              Bharatpur                         RAJASTHAN
-------------------------------------------------------------------------------
11              Ooty                              TN
-------------------------------------------------------------------------------
12              Niantal
-------------------------------------------------
13              Aligarh
-------------------------------------------------
14              Gorakhpur
-------------------------------------------------
15              Jhansi
-------------------------------------------------
16              Azambarh
-------------------------------------------------
17              Faizabad
-------------------------------------------------
18              Bijnore
-------------------------------------------------
19              Mirzapur                          UP
-------------------------------------------------
20              Raukhabad
-------------------------------------------------
21              Banda
-------------------------------------------------
22              Sultanpur
-------------------------------------------------
23              Lakhimpur
-------------------------------------------------
24              Raebareli
-------------------------------------------------
25              Ballia
-------------------------------------------------
26              Baharaich
-------------------------------------------------------------------------------
27              Behrampur
------------------------------------------------
28              Krishnangar
------------------------------------------------
29              Bankura                           WB
------------------------------------------------
30              Raiganj
------------------------------------------------
31              Suri
-------------------------------------------------------------------------------
</TABLE>

                                       72
<PAGE>
7TH YEAR COVERAGE

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
S.N.            YEAR-7                            CIRCLE
--------------------------------------------------------------------------------
<S>             <C>                               <C>
1               port blair                        AN
--------------------------------------------------------------------------------
2               dibrugarh
-------------------------------------------------
3               silchar
-------------------------------------------------
4               jorhat                            ASSAM
-------------------------------------------------
5               nagaon
-------------------------------------------------
6               kokrajhar
-------------------------------------------------
7               tezpur
--------------------------------------------------------------------------------
8               solan
-------------------------------------------------
9               kangra
-------------------------------------------------
10              hamirpur                          HP
-------------------------------------------------
11              mandi
-------------------------------------------------
12              kullu
--------------------------------------------------------------------------------
13              jammu
-------------------------------------------------
14              srinagar
-------------------------------------------------
15              udhampur                          J & K
-------------------------------------------------
16              rajouri
-------------------------------------------------
17              leh
--------------------------------------------------------------------------------
18              kavaratti                         KERALA
--------------------------------------------------------------------------------
19              shillong
-------------------------------------------------
20              imphal
-------------------------------------------------
21              aizwal                            NORTH-EAST
-------------------------------------------------
22              zero
-------------------------------------------------
23              agartala
-------------------------------------------------
24              kohima
--------------------------------------------------------------------------------
25              chamoli
-------------------------------------------------
26              almora                            UP
-------------------------------------------------
27              uttarkashi
--------------------------------------------------------------------------------
28              silliguri
-------------------------------------------------
29              koochbehar                        WB
-------------------------------------------------
30              malda
-------------------------------------------------
31              gangtok
--------------------------------------------------------------------------------
</TABLE>

                                       73<PAGE>
                                                                     EXHIBIT 4.6

                               GOVERNMENT OF INDIA
                         MINISTRY OF COMMUNICATIONS AND
                             INFORMATION TECHNOLOGY
                        DEPARTMENT OF TELECOMMUNICATIONS
                               TELECOM COMMISSION

                                LICENCE AGREEMENT

                                FOR PROVISION OF

                                INTERNET SERVICE
                         (INCLUDING INTERNET TELEPHONY)

                         No.820-7/2002-LR DATED 3/5/2002
                            -------------       --------

                          TOTAL PAGES Thirty Four (34)

                                                   For Videsh Sanchar Nigam Ltd.

                                                                    Sd/-
                                                              (K.K.Kheterpaul)
                                                            Authorised Signatory

Sd/-
(RITU PANDE)
Assistant Director General (LR-1)
Deptt.of Telecom, New Delhi.

                                       1

<PAGE>

                                    CONTENTS

<TABLE>
<S>                                                            <C>
1. Licence Agreement                                            3
2. Schedule 'A' - Service Area                                  8
3. Schedule 'B' - Quantum of Licence                            9
4. Schedule 'C'

PART I   -        DEFINITIONS                                  10

PART II  -        TERMS AND CONDITIONS

Cond. 1  -        Requirement to provide the service           14
         -        Security consideration                       15
         -        Application of the Indian Telegraph Act      17
         -        Prohibition of certain activities            18
         -        Application of the TRAI Act                  19
         -        Internet Telephony Service                   20
Cond. 2  -        Acceptance Testing and Quality Assurance     21
 "    3  -        Delivery of the Services                     21
"     4  -        Complaint Booking and Treatment              22
"     5  -        Right to Inspect                             22
"     6  -        Force - Majeure                              22
"     7  -        Interconnection with other networks          23
"     8  -        Requirement to Furnish Information to        24
                  the Licensor/Telecom authority
"     9  -        Extension of Licence                         25
"    10  -        Termination of licence                       25
"    11  -        Disputes with other parties                  27
"    12  -        Arbitration of Disputes                      28
"    13  -        Financial Conditions                         28
"    14  -        Set Off                                      30

PART - III        COMPLIANCE STATEMENT                         31

5. Schedule 'D' - Proforma for Performance Bank Guarantee      32
</TABLE>

                                       2
<PAGE>

                                LICENCE AGREEMENT

         THIS AGREEMENT made on the 03rd May of 2002 between the President of
India acting through Assistant Director General (LR), Ministry of
Communications, Department of Telecommunications, Sanchar Bhavan, 20, Ashoka
Road, New Delhi - 110 001 ( hereinafter called the LICENSOR) OF THE ONE PART

                                       And

M/s. Videsh Sanchar Nigam Limited

a company registered under the Companies Act 1956 and having its registered
office at M.G.Road, Fort, Mumbai-2
________________________________________________________________________________

__________________________________________( hereinafter called the LICENSEE
which expression shall unless repugnant to the context, include its successor in
business, administrators, liquidators and assigns or legal representatives) of
the OTHER PART.

         WHEREAS pursuant to the request of the LICENSEE, the LICENSOR has
agreed to grant licence to the LICENSEE on the terms and conditions appearing
hereinafter to establish, maintain and operate Internet Service (hereinafter
called the SERVICE) in the country of India as given in Schedule "A" annexed
hereto and the LICENSEE has agreed to accept the same.

NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:

1.       In consideration of observance of mutual covenants as well as payment
of the licence fee payable in terms of schedule 'B' and due performance of all
the terms and conditions on the part of the LICENSEE, the LICENSOR does, hereby,
grant on non-exclusive basis, licence to establish, maintain and operate Service
in the area given in Schedule "A", on the terms and conditions mentioned in
Schedule "C: annexed hereto.

2.       The licence is granted initially for a period of 15 years unless
terminated for default or for insolvency or for convenience or for transfer of
the licence under the provisions of condition "12" of Part II, Schedule "C". If
requested by LICENSEE, extension of the Licence, unless terminated earlier under
condition "10" of the Schedule "C" Part-II, may be granted by the LICENSOR at
suitable terms and conditions for the period of FIVE YEARS or more at one time.
The decision of the LICENSOR in this respect shall be final. The Licensor may
extend or refuse the extension of the Licence on request of the licensee
received latest by the end of 14th YEAR from the effective date and in the
absence of such request for extension, the Licence shall automatically be
terminated as per due date.

3.       The Licence shall be governed by the provisions of the Indian Telegraph
Act 1885, Indian Wireless Telegraphy Act 1933 and TRAI Act 1997 as modified from
time to time.

                                       3
<PAGE>

4.       Unless otherwise stated or appearing from context, all the schedules
annexed hereto including the certificates given along with application form and
Guide lines on Internet service no.845-51/97-VAS as well as the Guidelines for
issue of permission to offer Internet Telephony Services dated 21st March, 2002
will form part and parcel of this agreement. Provided, however, in case of
conflict or variance on an issue relating to this agreement, the terms set out
in the main body of this agreement read with all the Schedules annexed hereto
shall prevail.

5.       In this Agreement, words and expressions will have the same meaning as
is respectively assigned to them in Schedule "C".

6.       The LICENSOR may at any time revoke the Licence by giving a written
notice of 30 days after affording a reasonable opportunity of hearing on the
breach of any of the terms and conditions herein contained or in default of
payment of any consideration payable by the Licensee as provided hereunder.

7.1      The LICENSEE shall clearly indicate the specifications of the SERVICE
to the subscribers at the time of entering into contract with such subscriber.

7.2      In case of any complaint or dispute with regard to the Service from any
subscriber of the Service, such complaint or dispute shall be a matter between
such subscriber of the service and the licensee only. The Government/licensor,
BSNL, MTNL, VSNL or any other service provider licensed to provide connectable
systems shall not be party to any such complaint/dispute. The licensee shall be
responsible to suitably notify the above to all his subscribers of the service
before registering a request for and provisioning of the service.

7.3      The Licensee shall be solely responsible for installation, networking
and operation of necessary equipment and systems, treatment of subscribers'
complaints, issue of bills to its subscribers, collection of the revenue,
attending to claims and damages arising out of the services provided by him. The
LICENSEE shall make its own arrangements for all infrastructures involved in
providing the SERVICE. Further the Licensee shall clearly display and publicise
major specifications of subscriber terminal equipment at his premises which are
necessary for interworking/interfacing to telephone network.

8.       The licensee shall be free to fix his own tariff to be charged from
subscribers. The tariff shall be left open to be decided by market forces.
However, the TRAI (Telecom Regulatory Authority of India) may review and fix a
tariff at any time during the validity of the licence which shall be binding on
the Licensee.

8.1      The licensee shall be responsible to obtain its own IP address and
domain name from the competent authorities. In case the IP addresses are taken
from the Department of Telecommunications, the same are non-portable and have to
be returned to DOT at the termination of connectivity contract.

                                       4
<PAGE>

9.       The Performance Bank Guarantee of requisite amount shall be furnished
from time to time by the LICENSEE as required under the terms and conditions of
this Licence Agreement and in the proforma as provided in Schedule 'D' annexed
hereto.

10.      The LICENSEE shall not, without the prior written consent (can be
granted only as described below) of the Licensor, either directly or indirectly,
assign or transfer its rights in any manner whatsoever to any other party or
enter into any agreement for sub-licence and/or partnership relating to any
subject matter of the licence to any third party either in whole or in part. Any
violation of this term shall be construed as a breach of Licence Agreement and
the licence shall be liable for termination. Provided, however, that
installation of systems, equipment and network can be given on contract, but
providing the SERVICE can not be given to another party on contract. Provided,
further that the licensee can always employ or appoint agents or servants.

         Provided that the aforesaid written consent permitting transfer or
assignment will be granted

(i)      In accordance with the terms and conditions and procedures described in
Tripartite Agreement if duly executed amongst LICENSOR, LICENSEE and LENDERS.

(ii)     Whenever a merger of two licensee or other (Indian) companies is
approved vide High Court but no compromise in competition occurs in the
provision of service.

11.      The LICENSOR reserves the right to, in case of a default of any of the
terms and conditions stipulated in the Licence Agreement, impose any penalty as
it may deem fit under the provisions of this agreement.

12.      Notwithstanding anything contained hereinbefore, it is further agreed
and declared by the parties that:-

(i)      The licence is issued on non-exclusive basis i.e. other vendors may be
granted licence for the same service in the same area at the discretion of the
Licensor. DOT itself or through a designated Public Authority, has the right to
operate the service in any all service areas.

(ii)     The LICENSOR reserves the right to modify at any time the terms and
conditions of the licence covered under Schedule "A", "B", "C" and "D" annexed
hereto, if, in the opinion of the LICENSOR, it is necessary or expedient to do
so in the interest of the general public or for the proper conduct of telegraphs
or on security consideration, provided further that the licensor reserves right
to review the terms of this agreement based on the policy of further
liberalization whenever articulated in the context of New Telecom Policy.

(iii)    Notwithstanding anything contained anywhere else in the Licence
Agreement, the LICENSOR's decision shall be final on all matters relating to
this Agreement and application of terms and conditions herein.

                                       5
<PAGE>

(iv)     The LICENSOR reserves the right to take over the entire service,
equipment AND NETWORKS OF THE LICENSEE, IN PART OR in whole of the Service Area,
or revoke/terminate/suspend the licence in the interest of national security or
in the event of a national emergency/war or low intensity conflict or any other
eventuality in public interest as declared by the Government of India. The
specific orders or directions from the Government issued under such conditions
shall be applicable to the LICENSEE.

13.      Individuals or groups of organisations both in private and Government
sectors are permitted to deploy, indigenous or imported, encryption equipments
for providing secrecy in transmission up to a level of encryption to be
specified by telecom Authority. However, if encryption equipments of levels
higher than specified are to be deployed, individuals/groups/organisations shall
obtain Government clearance and shall deposit one set of keys with the Telecom
Authority.

14.      In supersession of any thing provided elsewhere, the effective date of
this licence shall be 25.1.1999.  The licence shall expire on 24.1.2014.

15.      The licence is granted to the LICENSEE on the condition that any change
in the Indian partners or their equity participation should be as stipulated in
the Indian Companies Act 1956.

         The LICENSEE shall be responsible to ensure that the total foreign
equity in the LICENSEE Company does not, at any time, exceed 74% of the total
equity, whenever it is likely to set up or has set up International gateway.

         The present Indian & Foreign partners/promoters and their equity held
in the LICENSEE Company as intimated by the company are recorded as follows:-

         Promoter/partner           Indian/Foreign            Equity held in the
                                                              LICENSEE Company

                          As per Annexure - E enclosed

16.      All matters relating to this licence will be subject to jurisdiction
of Courts in Delhi/New Delhi only.

                                       6
<PAGE>

17.      This license agreement replaces the old ISP license agreement
No.820-7/98-LR dated 25.1.1999 DIRECTION No.820-1/98-LR (Pt.II) dated 6th
August, 1999 and Amendments No:820-1/98-LR dated 10th October, 2001, 5th
November, 2001 and 8th March, 2002 and the old license is hereby cancelled with
effect from today.

         IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed through their respective authorised representatives the day and year
first above written.

         Signed and Delivered for and on behalf of President of India

Sd/-                                              For Videsh Sanchar Nigam Ltd
Ltd
By Mrs. RITU PANDE                                            Sd/-
Assistant Director General (LR), DOT                 Authorised Sigantory
New Delhi.

         Signed on behalf of M/s.Videsh Sanchar Nigam Limited
         By K.K.Kheterpaul,    holder of General Power of Attorney dated 11.4.02
            ------------------
executed in accordance with the Resolution No.______________ dated 02.05.02
passed by the Board of directors, in the presence of:- SATISH RANADE, Executive
Director (Legal) & Company Secretary.

Witnesses:

1.       Sd/-

2.       Sd/-

                                       7
<PAGE>

                                   SCHEDULE A

         SERVICE AREA CATEGORY 'A'

         The service area under the scope of this licence is All
                                                             ---
India            . For the purpose of providing the service, the licensee may
-----------------
install his equipment anywhere within the service area. However, the subscribers
will be responsible for procurement of Customer Premises Equipment(CPE). The
leased line subscribers of the service shall be located within the service area.
However, this restriction does not apply to dial the subscribers.

                             ......................

                                       8
<PAGE>

                                  SCHEDULE 'B'

1.1      QUANTUM OF LICENCE FEE AND SCHEDULE OF PAYMENTS

(i) The licence fee is payable by the licensee in consideration for grant of
this licence, for the complete duration for which this licence is granted. This
has no relation to the actual start provision of service by the licensee or any
mutual obligations between the licensee and any other service
provider/BSNL/MTNL/VSNL/Departments of the Central or State Government/local or
statutory bodies.

(ii) The Telecom Authority has decided to waive the Licence Fee for a period
upto 31.10.2003 and a nominal licence fee of One Rupee per annum will become
payable from 01.11.2003; however, the Telecom Authority reserves the right to
review and impose licence fee including Universal Service obligation (USO) levy
anytime during the validity of the licence, which decision with its terms and
conditions, shall be binding on the licensee.

                                       9
<PAGE>

                                  SCHEDULE 'C'

               PART I: DEFINITIONS, INTERPRETATIONS AND PROVISIONS
                           RELATING TO THE CONDITIONS

         Unless the context otherwise requires, the following expressions shall
have the meaning assigned to them in these conditions:-

    1.   APPLICABLE SYSTEMS: The "applicable system" means all the necessary
equipments /systems engineered to provide INTERNET Service as per
operational/technical and quality requirements and other terms and conditions of
the licence agreement and as laid down in the Guidelines for INTERNET Service
No.845-51/97-VAS as well as Guidelines for Issue of permission to offer Internet
Telephony Services dated 21st March, 2002.

2.       BSNL means Bharat Sanchar Nigam Limited.

3.       BSO means Basic Service Operators.

4.       CMSO means Cellular Mobile Service Operator.

5.       CONNECTABLE SYSTEM means a telecommunication system which is authorised
         to be run under a licence which can be connected to the applicable
         system.

6.       CPE means Customer Premises Equipment.

7.       THE AUDITOR means the Licensee's auditor for the time being appointed
         in accordance with the requirements of the Companies Act, 1956.

8.       DIAS: DOT's Gateway Internet Access services.

9.       DIRECT EXCHANGE LINE (DEL): A telephone connection between the
         subscriber's terminal equipment and a local exchange.

10.      DOMAIN NAME: Domain names in India are at present registered by NCST
         (National Centre for Software Technology), Mumbai, who allot the same
         to legitimate IP address holder on receipt of a written application.

11.      DOT means Department of Telecommunications, India, Government of India
         and/or its successors as the Licensor.

12.      EFFECTIVE DATE: The date on which this Licence Agreement is signed by
         the parties and if the parties have signed on different dates, the
         latter of the two dates.

                                       10
<PAGE>

13.      EMERGENCY means an emergency of any kind, including any circumstances
         whatever resulting from major accidents, natural disasters and
         incidents involving toxic or radio-active materials.

14.      EMERGENCY SERVICES means in respect of any locality, the relevant
         public, police, fir, ambulance and coast guard services for that
         locality.

15.      ENGINEERING: The technical application of the dimensioning rules and
         results thereof in order to provide the specified GRADE OF SERVICE
         (G.O.S.).

16.      GIAS: VSNL's Gateway Internet Access Services.

17.      INTERNET: Internet is a global information system that:

* is logically linked together by a globally unique address, based on Internet
Protocol (IP) or its subsequent enhancements /upgradations;

* is able to support communications using the Transmission Control
Protocol/Internet Protocol (TCP/IP) suite or its subsequent
enhancements/upgradations, and all other IP compatible protocols; and

18.      IP ADDRESSES:  Operation of Internet Service requires IP addresses
which is at present a 32 bit binary address. This address is required for each
permanent connection on Internet. Typically, it is required for ports of routers
and other ISP equipment and also for leased line connections to be provided to
end-users.

19.      ISP: means Internet Service Provider licensed to provide Internet
         Service under this licence.

20.      ISDN means Integrated Service Digital Network.

21.      LICENCE means a licence granted or having effect as if granted under
         section 4 of the Indian Telegraph Act 1885 and Indian Wireless
         Telegraphy Act 1933.

22.      LICENSEE: A registered Indian Company that has been awarded licence for
         providing the SERVICE.

23.      LICENSOR shall refer to the President of India acting through any
         authorised person, who granted Licence under Section 4 of Indian
         Telegraph Act 1885 and Indian Wireless Telegraphy Act 1933, unless
         otherwise specified.

24.      LOCAL AREA: Local Area is the Short Distance Charging Area (SDCA) of
         Department of Telecommunications.

25.      MESSAGE means anything falling within Sub Clause/paragraph (3) of
         Section 3 of the Indian Telegraph Act 1885.

                                       11
<PAGE>

26.      MTNL means Mahanagar Telephone Nigam Limited.

27.      NLDO means National Long Distance Operator.

28.      OPERATOR means any person who is authorised by the LICENSOR to run a
         Relevant Connectable System.

29.      PC means Personal Computer.

30.      PLMN means Public Land Mobile Network.

31.      PMRTS means Public Mobile Radio Trunking Service.

32.      PSTN means Public Switched Telephone Network.

33.      QOS means Quality of Service.

34.      SERVICE AREA: Separate licences shall be granted to any applicant
company for each service area. For this purpose, the country has been divided
into separate service areas in three categories as indicated below:-

(i)      Category "A" - This covers the territorial jurisdiction of the Union of
India except specified areas that may be notified to be excluded from time to
time.

(ii)     Category "B" - Any of the 20 Territorial Telecom Circles, four Metro
Telephone Districts of Delhi, Mumbai, Calcutta or Chennai and four major
telephone districts of Ahmedabad, Bangalore, Hyderabad or Pune are Category 'B'
service areas. The four Metro Telephone Districts (Delhi, Mumbai, Calcutta &
Chennai) are not part of any Telecom Circle, whereas the four major Telephone
Districts (Ahmedabad, Bangalore, Hyderabad & Pune) are part of respective
Telecom Circles.

(iii)    Category "C" - Service Area - Any Secondary Switching Area (SSA) of DOT
with geographical boundaries as on 1.4.98, will form a separate category "C"
Service Area with the exception that each of the four Metro Telephone Districts
of Delhi, Mumbai, Calcutta & Chennai and of four major Telephone Districts of
Ahmedabad, Bangalore, Hyderabad & Pune of the DOT with geographical boundaries
as on 1.4.98, will form a separate category "B" Service Area.

         Applicants will be required to submit separate application for each
service area. The ISP will be required to set up his nodes i.e., Routes/servers
within the geographical limits of the service area. An applicant company may be
granted any number of licences. Also, there shall be no limit on number of
licences that can be granted in a particular service area. The leased line
subscribers shall be from within the service area. However, the ISP can offer
dial up service from any part of the country.

                                       12
<PAGE>

         Existing E-Mail and VSAT Service Licensees may also obtain separate ISP
Licence for any number of the above mentioned service areas subject to
fulfilment of eligibility criteria.

35.      SERVICES OR SERVICE means Internet Access/Internet content services
including Internet telephony as mentioned in Clause 1.14 of schedule 'C'.

36.      SERVICE PROVIDER means the Government and includes a licensee.

37.      IP means Session Initiated Protocol.

38.      SUBSCRIBER - SUBSCRIBER MEANS ANY PERSON OR LEGAL ENTITY WHO AVAILS THE
service from the licensee.

39.      TELECOM AUTHORITY: The Director General, Telecommunications, Government
of India and includes any officer empowered by him to perform all or any of the
functions of the Telegraph Authority under the Indian Telegraph Act, 1885 or
such other authority as may be established by law.

40.      TECHNICAL SPECIFICATIONS: As laid down in the Guidelines for INTERNET
Service No.845-51/97-VAS.

41.      TARIFF: Charges payable by a subscriber for the service provided.

42.      TRAI - means the Telecom Regulatory Authority of India established
under the TRAI Act, 1997.

43.      VALIDITY OF THE LICENCE: The period for which this licence is
effective.

44.      VSNL - means "Videsh Sanchar Nigam Ltd."

45.      ILDO - means International Long Distance Operator.

46.      W.P.C. means Wireless Planning & Co-ordination Wing of the Ministry of
Communications and Information Technology, Department of Telecommunications,
Government of India.

                                       13
<PAGE>

                                  SCHEDULE "C"

         PART  II:    TERMS AND CONDITIONS

         CONDITION 1:    REQUIREMENT TO PROVIDE THE SERVICE

1.1      The LICENSEE shall commission the Applicable Systems within 24 months
from the effective date of the licence and offer the service on demand to its
customers.

1.2      LICENSEE shall be solely responsible for the installation, networking
and operation of necessary equipment and systems, treatment of subscribers'
complaints, issue of bills to its subscribers, attending to claims and damages
arising out of his operation. The LICENSEE shall make its own arrangements for
all infrastructures involved in providing the SERVICE.

1.3      For the purpose of providing the SERVICE, the LICENSEE shall install
his own suitable equipment so as to be compatible with the other service
providers' equipments and connect the same DIAS' or GIAS or a Gateway owned by
public/Government organisation for routing International Internet Traffic,
Private ISPs are also allowed to set up International Gateways after obtaining
security clearance/approval from Authority.

1.3.1.   Internet Subscribers can procure their own terminal equipment or lease
the same from the ISP.

1.4.        In the process of operating the SERVICE, the LICENSEE shall be
responsible

for:-
         (i)      The installation of the Internet Nodes i.e. routers/Servers
                  etc.
         (ii)     The proper operation and maintenance of his network
                  infrastructure;

1.5.     If the LICENSEE has, in addition leased or rented other
telecommunication resources from the BSNL/MTNL/ VSNL or any other Telecom
Service Provider authorised by the Government of India, purely for the purpose
of providing the service and networking its geographically dispersed equipment,
such resources will be a matter between the ISP and the service provider(s) and
will be subject to tariff as fixed by BSNL/MTNL/VSNL/ other Telecom Service
Provider from time to time.

1.6      "WARRANTY AS TO QUALITY":- The LICENSEE shall warrant that SERVICES to
be provided by him shall be of the acceptable grade, consistent with the
established and generally accepted standards.

                                       14
<PAGE>

1.7      The licensee shall provide to the Telecom Authority, a monthly report
indicating the details of ISP nodes or points of presence with their locations.
In case new nodes are to be installed, one month prior notice is required to be
given to the licensor.

1.8      The billing disputes or differences, between the LICENSEE and its
subscribers will be settled amongst themselves.

1.9      MTTR (Mean Time To Restore):

1.9.1.   90% of faults resulting due to subscribers complaints should be
rectified within 24 hours and 99% within 3 days.

1.9.2.   The Licensee will keep a record of number of faults and rectification
reports in respect of each service area and produce the same to the Authority as
and when required.

1.10     SECURITY CONSIDERATION:

1.10.1   Individuals/ Groups/Organisations are permitted to use as customer
encryption upto 40 bit key length in the RSA algorithms or its equivalent in
other algorithms without having to obtain permission. However, if encryption
equipments higher than this limit are to be deployed,
individuals/groups/organisations shall do so with the permission of the Telecom
Authority and deposit the decryption key, split into two parts, with the Telecom
Authority.

1.10.2   The LICENSEE shall provide to the LICESOR, location details of the
equipment provided by ISP, Implementation of any installation of the concerned
equipment and execution of the concerned project shall be taken up only after
the approval by the LICENSOR and locations of these centres shall not be changed
without prior approval of the LICENSOR. This requirement shall be applicable
only to such areas as are sensitive from security point of view, as may be
notified from time to time by the LICENSOR. In the interest of national
security, the ISPs shall block Internet sites and/or individual subscribers, as
identified and directed by the Telecom Authority from time to time.

1.10.3   Each ISP must maintain a log of all users connected and the service
they are using (mail, telnet, http etc.). The ISPs must also log every outward
login or telnet though their computers. These logs, as well as copies of all the
packets originating from the Customer Premises Equipment (CPE) of the ISP, must
be available in REAL TIME to Telecom Authority. Type of logins, where the
identity of the logged-in user is not known, should not be permitted.

1.10.4   The LICENSEE shall provide necessary facilities to the Government to
counteract espionage, subversive act, sabotage or any other unlawful activity.
The said facilities to

                                       15
<PAGE>

be provided by the licensee will depend upon the specific situation at the
relevant time. Type and extent of facility(ies) required shall be at the sole
discretion of the Government of India.

1.10.5   The LICENSEE shall not use any hardware/software which are identified
as unlawful and/or render network security vulnerable. The LICENSEE shall make
available, on demand, to the agencies authorised by the Government of India,
full access to the equipment provided by the ISP for technical scrutiny and
detailed inspection.

1.10.6   All foreign personnel likely to be deployed by the LICENSEE for
installation, operation and maintenance of the LICENSEE's network shall be
required to obtain security clearance by the Government of India prior to their
deployment. The security clearance will be obtained from the Ministry of Home
Affairs, Government of India.

1.10.7   Software used by each ISP shall conform to a set of latest operational
requirements which will be periodically published by the Telecom Authority.

1.10.8   LICENSOR shall have the right to take over the SERVICE, equipment and
networks of the LICENSEE either in part or in whole of the Service Area as per
directions if any, issued in the public interest or national security by the
Government in case of emergency or war or low intensity conflict or any other
eventuality. Provided any specific orders or direction from the Government
issued under such conditions shall be applicable to the LICENSEE and shall be
strictly complied with.

1.10.9   LICENSOR reserves the right to modify these conditions or incorporate
new conditions considered necessary in the interest of national security.

1.10.10  On Security related issues, an Inter-Ministerial Committee shall be set
up consisting of the representatives of DOT, Cabinet Secretariat, MHA, MOD, DOE
and NIC and representatives from NASSCOM to look into the technical aspects of
monitoring of communications in this sector ( including Internet) to enable the
setting up of the monitoring infrastructure (which, in many cases, would have to
be funded by the ISPs). Any condition imposed by this Inter-ministerial
Committee during the validity of the licence shall be binding on the licensee.

1.10.10.1         MONITORING FACILITIES.

(A)      AT EACH - INTERNATIONAL GATEWAY LOCATION AND/OR ISP NODE WITH A
ROUTER/SWITCH HAVING AN OUTBOUND CAPACITY OF 2 MBPS OR MORE:

(i)      Every international gateway location and/or the ISP node with a
router/switch having a capacity of 2 Mbps or more shall be equipped with a
monitoring Centre at the cost of the ISP. Suitable appropriate monitoring system
is to be set up by ISPs carrying Internet telephony traffic through their
Internet gateways and/or ISP nodes at their own

                                       16
<PAGE>

cost, as per the requirement of the security agencies and the cost of
maintenance of the monitoring equipment and infrastructure at the monitoring
centre located at the premises of the licensee shall be borne by the ISP.

(ii)     Office space of 10 feet X 10 feet with adequate uninterrupted power
supply and air-conditioning which will be physically secured and accessible only
to the monitoring agencies will have to be provided by the ISP at each location,
free of cost.

(iii)    In addition to the equipment, one local exclusive telephone line is to
be made available by the ISP at the monitoring centre, the cost to be borne by
the ISP.

(iv)     The cost of maintenance of the equipment and infrastructure mentioned
above at the monitoring centre located at the premises of the ISP is to be borne
by the ISP.

(v)      Each router/switch of the ISP should be connected by the LAN operating
at the same speed as the router/switch, the monitoring equipment will be
connected to this network.

(vi)     For a national ISP or an ISP having multiple nodes/point of presence,
if it is possible to monitor the traffic in all the Routers/switches from a
central location, a central monitoring centre would be acceptable. However, in
such a case, the ISP would, at the outset, be able to demonstrate to the Telecom
Authority that all routers/ switches are accessible from the central monitoring
centre. Moreover, the ISPs would have to inform the Telecom Authority of every
change that takes place in their topology/ configuration, and demonstrate that
all routers/switches continue to be accessible from the central monitoring
centre. The decision of Telecom Authority will be final on the issue.

(B)      AT LOCATION WHERE THE ISP NODE ROUTER/SWITCH HAS AN OUTBOUND CAPACITY
LESS THAN 2 MBPS:
At locations where the ISP node has router/switch with outbound capacity less
than 2 Mbps, the ISPs shall provide (I) a LAN, (ii) office space of 10 feet by
10 feet and (iii) a local exclusive telephone line, all at the cost of the ISP.
The monitoring equipment will be provided by the monitoring/security agencies.

1.10.11  The Internet nodes on places of security importance (as identified by
security agencies from time to time) would be routed through VSNL/BSNL only.
Interconnection of these nodes to other nodes within the country directly is not
permitted. As on date these areas are Punjab, J &K and North Eastern States,
Border areas of Rajasthan, Andaman and Nicobar Islands and coastal areas of
Gujarat and Tamil Nadu.

1.11     APPLICATION OF INDIAN TELEGRAPH ACT:

1.11.1   The LICENSEE shall furnish all necessary means and facilities as
required for the application of provisions of Section 5(2) of the Indian
Telegraph act, 1885, whenever occasion so demands.

                                       17
<PAGE>

         At present Section 5(2) of Indian Telegraph Act reads as follows:
"on the occurrence of any public emergency or in the interest of public safety,
the Central Government or a State Government or any officer specially authorised
in their behalf by the Central Government or a State Government may, if
satisfied that it is necessary or expedient to do so in the interests of the
sovereignty and integrity of India, the security of the State, friendly
relations with foreign states or public order or for preventing incitement to
the commission of an offence for reasons to be recorded by order, direct that
any message or class of messages to or from any person or class of persons or
relating to any particular subject, brought for transmission by or transmitted
or received by any telegraph, shall not be transmitted or shall be intercepted
or detained or shall be disclosed to the Government making the order or an
officer thereof mentioned in the order.

         Provided that press messages intended to be published in India, or
correspondents accredited to the Central Government or a State Government shall
not be intercepted or detained, unless their transmission has been prohibited
under this sub section".

1.11.2   The LICENSEE shall frame a set of commercial code that govern
registration, provisioning and tariffication for the services offered to the
public. This should be done before commercial launch of the service and shall be
consistent with the terms and conditions of licence.

1.11.3   Nothing provided and contained anywhere in this Licence Agreement shall
be deemed to affect adversely anything provided or laid under the provisions of
Indian Telegraphs Act, 1885 or any other law in force, as enacted/amended from
time to time.

1.12     PROHIBITION OF CERTAIN ACTIVITIES BY THE LICENSEE.

1.12.1   The LICENSEE shall not engage provision of any other Telecom SERVICE
unless so licensed

1.12.2   For the avoidance of doubt, it is, hereby declared that nothing
contained in Condition 1.12.1 above shall preclude the LICENSEE from engaging in
advertising and promotional activities relating to any of the Applicable
Systems.

1.12.3   Voice communication from anywhere to anywhere by means of dialing a
telephone number (PSTN/ISDN/PLMN) as defined in National Numbering Plan is not
permitted;

1.12.4   Originating the voice communication service from a Telephone in India
is not permitted;

1.12.5   Terminating the voice communication to telephone within India is not
permitted;

                                       18
<PAGE>

1.12.6   Establishing connection to any Public Switched network in India and/or
establishing gateway between Internet & PSTN/ISDN/PLMN in India, is not
permitted;

1.12.7   Use of dial up lines with outward dialing facility from nodes is not
         permitted;

1.12.8   Interconnectivity is not permitted between ISPs who are permitted to
offer Internet Telephony Services and the ISPs who are not permitted to offer
Internet Telephony Services.

1.12.9   OBSCENE MATERIAL AND APPLICABILITY OF CYBER LAWS:

         The LICENSEE shall ensure that objectionable, obscene, unauthorised or
any other content, messages or communications infringing copyright, Intellectual
property right and international & domestic cyber laws, in any form or
inconsistent with the laws of India, are not carried in his network, the ISP
should take all necessary measures to prevent it. In particular, LICENSEE is
obliged to provide, without delay, all the tracing facilities of the nuisance or
malicious messages or communications transported through his equipment and
network, to authorised officers of Government of India/State Government, when
such information is required for investigations of crimes or in the interest of
national security. The licence shall be governed by the provisions of the
Information Technology (IT) Act 2000, as modified from time to time. Any damages
arising out of default on the part of licensee in this respect shall be sole
responsibility of the licensee.

1.12.10  The use of the network for anti-national activities would be construed
as an offence punishable under the Indian Penal Code or other applicable law.
The networks cannot be used in such a manner as to endanger or make vulnerable a
networked infrastructure. Acts such as break-ins or attempted break-ins of
Indian networks shall be regarded as an anti-national act and shall be dealt
with in accordance with the Indian Penal Code. ISPs must ensure that their
services are not used for such purposes.

1.12.11  In case any confidential information is divulged to the LICENSEE for
proper implementation of the agreement, it shall be binding on the licensee, its
sub-contractors, agents and servants to maintain its secrecy and
confidentiality.

1.13     APPLICATION OF THE TRAI ACT 1997

         The Licence shall be governed by the provisions of the TRAI Act, 1997,
as modified from time to time. The attention of the licensee is specifically
drawn to the following provisions of the TRAI Act 1997 which reads as follows:-

Section 11.(1) Notwithstanding anything contained in the Indian telegraph act
1885, the functions of the Authority shall be to -

                                       19
<PAGE>

(a)      ensure technical compatibility and effective inter-connection between
         different service providers;
(b)      protect the interest of the consumers of telecommunication service;
(c)      monitor the quality of service and conduct the periodical survey of
         such provided by the service providers;
(d)      inspect the equipment used in the network and recommend the type of
         equipment to be used by the service providers

Section 12(1) Where the Authority considers it expedient to do so, it may, by
order in writing, -

(a)      call upon any service provider at any time to furnish in writing such
         information or explanation relating to its affairs as the Authority may
         require ; or
(b)      appoint one or more persons to make an inquiry in relation to the
         affairs of any service provider; and
(c)      direct any of its officers or employees to inspect the books of account
         or other documents of any service provider.

1.14     INTERNET TELEPHONY SERVICE.

1.14.1   Internet Telephony is a service to process and carry voice signals
         offered through public Internet by the use of Personal Computers (PC)
         or IP based Customer Premises Equipment (CPE) connecting the
         following:-

         (a)      PC to PC;  within or outside India
         (b)      PC in India to Telephone outside India
         (c)      IP based H.323/SIP Terminals connected directly to ISP nodes
                  to similar Terminals; within or outside India.

1.14.2   Internet Telephony is a different service in its scope, nature and kind
from real time voice service as offered by other licensed operators like BSO,
CMSO, NLDO, ILDO and PMRTS.

1.14.3   Except whatever is described in conditions 1.14.1 and 1.14.2 herein
above, no other form of Internet Telephony is permitted.

1.14.4   Addressing scheme for Internet Telephony shall only conform to IP
Addressing Scheme of Internet assigned Numbers Authority (IANA) exclusive of
National Numbering Scheme/plan applicable to subscribers of Basic/Cellular
Telephone Service.

                                       20
<PAGE>

             CONDITION - 2: ACCEPTANCE TESTING & QUALITY ASSURANCE:

2.1      ACCEPTANCE TESTING:

                  The Acceptance Testing of any interface equipment connected
to the DOT network will be carried out by the Acceptance Testing party of the
DOT. The Acceptance Testing schedule shall be mutually agreed. Adequate time,
not less than 30 days, will be given by the licensee for these tests.

2.2      QUALITY ASSURANCE:

         The Telecom Authority shall have right to check and measure the quality
of service provided by the licensee at any time during the currency of the
licence.

         The LICENSEE shall submit to the LICENSOR a half yearly report on the
quality of SERVICE offered to its subscribers indicating the levels of
performance achieved.

                  CONDITION 3: DELIVERY OF THE SERVICES

3.1      The LICENSEE shall be responsible for installation, testing and
commissioning of all the equipment to provide the services. It will be the
responsibility of the Licensee to obtain IP address, domain name etc. from
competent authority. (In case the IP addresses are taken from the Department of
Telecommunications, the same are non portable and have to be returned to DOT at
the termination of connectivity contract.) However, all performance tests
required for successful commissioning of the service may also be carried out by
the LICENSOR, if it so desires, before the services are commissioned for public
use. The LICENSEE shall supply all necessary literature, drawings, installation
materials regarding the equipment installed for commissioning of the services.
The LICENSEE shall supply all the tools, test instruments and other accessories
to the testing party of the LICENSOR for conducting the tests.

3.2      The licensee shall provide service within 24 months from the date of
signing of the licence agreement. Date of commercial launch will be the date on
which full commercial services are provided to the subscribers.

3.3      The list of  performance tests will be furnished by the LICENSEE one
month prior to the date of commissioning to the LICENSOR.

3.4      In case the Licensor chooses to conduct performance test, delay caused
due to rectification of deficiencies, if any, in the commissioning/provision of
SERVICES, will be to the account of the LICENSEE.

                                       21
<PAGE>

3.5      The LICENSEE shall provide the SERVICE in the Service Area to any
individual or legal person including customers located in RURAL BELT(S) OF THE
LICENSED SERVICE AREA without any discrimination unless directed by the LICENSOR
in writing to so refuse.

3.6      The LICENSEE indemnifies the LICENSOR against all actions brought
against the LICENSOR for breach of privacy or unauthorised interruption of data
transmitted by the subscribers.

                  CONDITION 4: COMPLAINT - BOOKING AND TREATMENT

4.1      The LICENSEE shall be responsive to the complaints lodged by his
subscribers.  He shall rectify the defects within the MTTR specified.

4.2      The LICENSEE shall equip himself with adequate system to deal with the
complaints from his subscribers, test the part of the equipment and external
plant wherever relevant, and take necessary corrective measures to bring the
faulty elements back into satisfactory operation. It shall maintain the history
sheets for each installation, statistics and analysis on the overall maintenance
status.

4.3      The Licensee shall log all complaints reported by his subscribers
chronologically and with details of action taken on the same.

                  CONDITION 5: RIGHT TO INSPECT

         The LICENSOR, or its authorised representative shall have the right to
inspect the internet nodes set up by the Licensee to give service to his
subscribers. The LICENSOR shall, in particular but not limited to, have the
right to have access to leased lines, junctions, terminating interfaces,
hardware/software, memories of semiconductor, magnetic and optional varieties,
wired options, distribution frames, and to enter into dialogue with the system
through Input/output devices or terminals. The LICENSEE will provide the
necessary facilities for continuous monitoring of the same, if required by the
LICENSOR or its authorised representative(s). The LICENSOR will ordinarily carry
out inspection after reasonable notice except in circumstances where giving such
a notice will defeat the very purpose of the inspection.

                  CONDITION 6:  FORCE - MAJEURE

         If, at any time during the continuance of this licence, the performance
in whole or in part, by either party, of any obligation under it is prevented or
delayed, by reason of war or hostility, acts of the public enemy, civil
commotion, sabotage, fire, flood, Act of State or direction from Statutory
Authority, explosion, epidemic, quarantine restriction, strikes and lockouts (as
are not limited to the establishments and facilities of the LICENSEE), or act of
GOD (each hereinafter referred to as EVENT), provided notice of

                                       22
<PAGE>

happenings of any such EVENT is given by either party to the other, within 21
days from the date of occurrence thereof, neither party shall, by reason of such
EVENT, be entitled to terminate the licence, nor shall either party have any
such claims for damages against the other, in respect of such non-performance or
delay in performance. Provided SERVICE under the licence shall be resumed as
soon as practicable, after such EVENT comes to an end or ceases to exist. The
decision of the LICENSOR as to whether the SERVICE may be so resumed ( and the
time frame within which the SERVICE may be resumed) or not, shall be final and
conclusive. However, the Force Majeure events noted above will not in any way
cause extension of the period of Licence and will also not be a ground for
non-payment of Licence fee.

                  CONDITION 7:  INTERCONNECTION WITH OTHE NETWORKS

7.1      Direct interconnectivity between two separately licensed ISPs shall be
permitted; however, Interconnectivity is not permitted between ISPs who are
permitted to offer Internet Telephony Service and the ISPs who are not permitted
to offer Internet Telephony Services. Authorised public/Government organisations
will be allowed to provide INTERNET Gateway access including international
leased circuits directly without going through VSNL Gateways. Private ISPs are
allowed to provide such Gateways after obtaining Security clearances for which
the Interface of Private ISPs shall only be with the Telecom authority.

7.2      The licensee may obtain the transmission link on lease from DOT,
Licensed Basic Service Operators Railways, State Electricity Boards, National
Power Grid Corporation or any other operator specially authorised to lease such
lines to the ISPs. The licensee may also establish its own transmission links
within its service area for carrying traffic originated and terminated by his
subscribers, provided that such capacities are not available from any other
authorised agencies and subject to permission of Telecom Authority.

7.3      An ISP may provide Internet Service to any VSAT subscriber (who could
be served by a shared hub commercial service provider or captive private VSAT
network), if the VSAT is located within the service area of the ISP. For his
purpose, a direct interconnection of VSAT or VSAT-hub through leased line
obtained from an authorised provider to the ISP's node/server shall be permitted
only for the flow of Internet traffic. The existing Licence for Closed users
Group Domestic 64 KBPS Data Network via Insat Satellite System does not grant
long distance carrier rights to the licensee. The ISP shall provide to the
Telecom Authority a monthly statement of VSAT subscribers served with their
locations and details of leased line interconnection with the VSAT hub. The VSAT
hub, however, need not be located in the service area of the ISP.

7.4      Resources required for interconnecting the licensee's network to the
network of upstream internet access provider (DOT/VSNL etc.) or any other
service provider licensed by the Telecom Authority including time frame for
provision of the same, will be mutually agreed between the parties concerned.
The resources may refer to include but not limited to physical junctions, PCM
derived channels, private wires, leased lines,

                                       23
<PAGE>

data circuits and other network elements. The licensee shall apply for an obtain
the network resources from the concerned parties. The tariff of such network
resources is outside the scope of this licence agreement. Licensor will have no
obligation to obtain such resources from other parties.

7.5      INTERCONNECTIVITY REQUIREMENTS:- Private ISPs shall use IP(Internet
Protocol) in conjunction with Transmission Control Protocol (TCP) and shall meet
the interface requirements of the Internet Access providers such as
BSNL/MTNL/VSNL to whose network, his node is connected. Some of the interfaces
required are given below:-

         INTERFACE REQUIREMENTS

         (I)      SUBSCRIBER DIAL UP ACCESS
         2 wire access over PSTN for modem interface.
         2 wire dial up access on ISDN Basic & Primary rate interfaces.

         (II)     LEASED LINE INTERFACE
         64K, N x 64K or 2.048 Mb/s, N x 2.048 Mb/s Leased lines.
         Frame Relay.
         X.25
         ATM
         G.703

         Access to internet through authorised Cable Operator shall be permitted
without additional licensing subject to applicable Cable Laws (The Cable
Television Networks Regulation) Act, 1995) as modified from time to time.

'Last mile' linkages shall be freely permitted within Local Area either by fibre
optic or radio communication for ISPs. In case of radio links, clearance from
WPC wing of the DOT shall be required to be obtained by the ISPs to avoid
frequently interference.

7.6      QUALITY OF SERVICE: The quality of service (QOS) shall be as prescribed
from time to time by TRAI/Licensor; however, at present QOS is not prescribed.

         CONDITION 8: REQUIREMENT TO FURNISH INFORMATION TO THE LICENSOR/TELECOM
AUTHORITY

8.1      Subject to Condition 8.2, the LICENSEE shall furnish to the TELECOM
AUTHORITY, in such manner and at such times as the AUTHORITY may require, such
documents, accounts, estimates, returns or other information.

                                       24
<PAGE>

8.2      The LICENSEE may not be required to procure or furnish a report which
would not normally be available to it unless the TELECOM AUTHORITY considers the
particular report essential to enable it to exercise its functions.

8.3      ENGINEERING DETAILS:

         The LICENSEE shall furnish complete technical details including traffic
for proper engineering, planning and dimensioning of the interconnect equipment
at the network-network interface (NNI).

8.4      The Licensee shall make available all the billing details of any
subscriber on demand by Telecom Authority for up to one year.

8.5      The Licensee shall provide to the Licensor on regular basis the volume
of Internet Telephony traffic flowing through his network.

         CONDITION 9: EXTENSION OF LICENCE:

         This licence is valid initially for a period of FIFTEEN YEARS unless
terminated earlier. If requested by the LICENSEE, extension may be granted by
the LICENSOR at suitable terms for period of five years or more at a time. The
decision of the LICENSOR shall be final in the matter. The LICENSOR shall extend
or refuse extension of the licence on a request received by it. Such request for
extension may be made during 14th year of Licence and in any case before expiry
of 14 years from effective date. If no request for extension is received by
then, the licence shall automatically stand terminated as per due date.

         The licence will ordinarily be renewed on such terms and conditions as
may be determined by the LICENSOR.

         CONDITION 10: TERMINATION OF THE LICENCE:

10.1     TERMINATION FOR DEFAULT:

         The LICENSOR may, without prejudice to any other remedy for breach of
conditions of licence, by written notice of 30 days, issued to LICENSEE at its
registered office 30 days in advance, terminate this licence in whole or part
under any of the following circumstances:

         (a)      if the LICENSEE fails to commission or deliver the SERVICE
within the time period(s) specified in the licence or in any extension thereof,
if granted by the LICENSOR. However, this does not prevent the licensee from
commissioning the service even after scheduled date of commissioning, provided
the licence does not already stand terminated and the Performance Tests are
satisfactory.

                                       Or

                                       25
<PAGE>

         (b)      if the LICENSEE fails to perform any other obligation(s) under
the Licence including remittance of timely payments of Licence fee due to the
LICENSOR and the LICENSEE does not rectify the failure within a notice period of
30 days or during such further period, as the LICENSOR may authorize in writing
in this regard.

         In the event of such termination of licence, the amount equivalent to
Performance Bank Guarantee (PBG) shall be recovered by encashing the PBG and
money so recovered shall be forfeited. The Licensee shall not be entitled to any
damages or compensation for such termination.

10.2     TERMINATION FOR INSOLVENCY:

         The LICENSOR may, at any time, terminate the licence without
compensation to him, if the LICENSEE becomes bankrupt or otherwise insolvent or
applies for being adjudicated as insolvent/bankrupt, provided such termination
shall not prejudice or affect any right of action which has accrued or will
accrue thereafter to the LICENSOR. The right of termination will arise on the
LICENSEE being adjudicated or applying for being adjudicated as bankrupt.

10.3     TERMINATION FOR CONVENIENCE:

         If the LICENSEE desires to surrender the licence, it shall give an
advance notice of 30 days to the Licensor to this effect. If the service is in
operation, the licensee shall also intimate its subscribers of consequential
withdrawal of service by serving a 15 days notice to them. The financial
liability of the licensee company for termination of the licence for convenience
shall be as below:-

         (a)      After start of service:- If during the notice period,
                  acceptable level of service is not delivered to the customer,
                  the licensee shall forfeit all claims on the Performance Bank
                  Guarantee which shall be encashed and the amount shall be
                  adjusted towards damages.

         (b)      Before start of service:- The licensee can surrender the
                  licence by paying surrender charges equivalent to 5% of the
                  Performance Bank Guarantee (PBG) amount i.e. Rs.10 lakhs for
                  category 'A', Rs.1 lakh for category 'B' and Rs.15,000 for
                  category 'C' licences respectively. The PBG shall be returned
                  after temination of the licence and ensuring clearance all
                  dues as per Clause 10.5.4.

                                       26
<PAGE>

10.4     TERMINATION FOR TRANSFER OF THE LICENCE:

         THE licensee shall not in any manner whatsoever, transfer the licensing
rights granted to it, to any other party without written consent of Licensor.
Any violation shall be construed as a breach of licence and the licence shall be
terminated in accordance with the provisions as contained in condition 10.1
hereinabove.

10.5     ACTIONS PURSUANT TO TERMINATION OF LICENCE AS PER CLAUSES 10.1, 10.2,
         10.3 AND 10.4 ABOVE:

10.5.1   In the event of termination of the licence, the LICENSOR may procure
upon such terms and conditions and in such manner as deemed appropriate/fit, the
required resources will make up for those not installed, not delivered or not
brought into commission so as to enable provision of SERVICE and the LICENSEE
shall be liable to the LICENSOR for any excess extra costs for such corrective
efforts. The criteria for determining the terms and conditions for such
procurement will depend upon the market prices, prevailing at the time of
procurement. The decision of the LICENSOR in this matter shall be final in all
respects.

10.5.2   Whenever the licence is terminated or not extended, the LICENSOR may,
in order to ensure the continuity of the SERVICE, take such steps, as are
necessary, including the following:-

         (i)      permit the Department of Telecommunications/MTNL or its
successor to take over; or

         (ii)     issue licence to another Indian Company for running the
SERVICE. The LICENSEE shall facilitate taking over by DOT/MTNL or the new
LICENSEE all those assets as are essential for the continuity of the SERVICE.

10.5.3   During the period when a notice for termination of licence is pending,
the Quality of Service to the Subscribers shall be maintained. If the SERVICE
quality is not maintained, (during the notice period), it will be treated as
breach of licence conditions and will be dealt with as such including recovery
of damages.

10.5.4   The Performance Bank Guarantee, if due, shall be returned to the
licensee company 6 months after the termination of the licence and after
ensuring clearance of any dues which the licensee company is liable to pay.

                  CONDITION 11: DISPUTES WITH OTHER PARTIES

11.1     In the event of any dispute of the LICENSEE with any other service
provide or any party other than licensor due to any reason whatsoever, the
dispute will be sorted out among themselves and LICENSOR will have no liability
in any manner. However, in

                                       27
<PAGE>

case of dispute arising with other parties due to non-observance of rules and
regulations by the LICENSEE as provided in this licence, the LICENSOR will have
full powers to take any action against licensee as is provided in the relevant
clauses of this licence. The LICENSEE undertakes to indemnify LICENSOR in
respect of any action against LICENSOR for acts of commission or omission on the
part of the LICENSEE, its agents and servants.

                  CONDITION 12: ARBITRATION OF DISPUTES:

12.1     In the event of any question, dispute or difference between parties
arising under the licence, or in connection therewith, except as to the matter,
the decision of which is specifically provided under the licence, the same shall
be referred to the sole arbitration of the TELECOM AUTHORITY or in case its
designation has changed or its office is abolished, then, in such case, to the
sole arbitration of the officer for the time being entrusted, whether in
addition to his duties the functions of the TELECOM AUTHORITY or by whatever
designation such officer may be called (hereinafter referred to as the said
officer), and if the TELECOM AUTHORITY or the said officer is unable or
unwilling to act as such, to the sole arbitration, of some other person
appointed by the TELECOM AUTHORITY or the said officer. The arbitration
proceedings shall be in accordance with the Indian Arbitration and Conciliation
Act, 1996 and rules framed thereunder or any modifications or re-enactment
thereof made from time to time.

12.2     There will be no objection to any such appointment that the Arbitrator
is Government Servant, or he has to deal with the matter to which the licence
relates. The award of the arbitrator shall be final and binding on the parties.
In the event of such Arbitrator to whom the matter is originally referred, being
transferred or vacating his office, or being unable to act for any reason
whatsoever, in case the telecom Authority or the said officer was himself acting
as an officer, his successor in office shall act as an Arbitrator or may appoint
some other person to act as an Arbitrator. In case the retiring Arbitrator was a
person appointed by the Telecom Authority or the said officer, a new Arbitrator
shall be appointed in his place by the Telecom Authority or the said officer and
the new Arbitrator shall be entitled to proceed from the state at which it was
left out by his predecessor.

12.3     The venue of arbitration proceeding shall be the office of TELECOM
AUTHORITY at New Delhi or such other place as the arbitrator may decide.

         CONDITION 13: FINANCIAL CONDITIONS

13.1     TARIFF: LICENSEE will be free to fix its own tariff to be charged from
subscriber. The tariff shall be left open to be decided by market forces. The
licensee company shall intimate the Telecom Authority, the tariff for the
service to be charged

                                       28
<PAGE>

from its subscribers and any changes thereof. However, the TRAI (Telecom
Regulatory Authority of India) may review and fix a tariff at any time during
the validity of the licence which scale of tariff shall be binding on the
Licensee.

13.2     OWNERSHIP OF THE CUSTOMER PREMISES EQUIPMENT:  The provision of
Customer Premises Equipment (CPE) at subscriber's premises shall be
responsibility of the subscriber.

13.3     THE COMMUNICATION RESOURCES & OTHER SUPPORT FACILITIES: LICENSEE will
have to make its own arrangements for all infrastructure involved in providing
the SERVICE. However, the charges for any communication resources required for
the purpose of networking and delivery of Internet Traffic to the upstream
network access provider, i.e., BSNL/MTNL/VSNL or other licensed service provider
on the request of the LICENSEE will be at the rates fixed by the BSNL/MTNL/VSNL
or other licensed service provider from time to time.

13.4     The LICENSEE shall be bound by the terms and conditions of the licence
granted as well as by such regulations and instructions as are issued by the
LICENSOR and/or its successors from time to time.

13.5     PREPARATION OF ACCOUNTS:

The LICENSEE Shall:

(a)      maintain and prepare accounting records, sufficient to show and explain
its transactions in respect of each financial year or part thereof of the
LICENCE during which this Licence is in force, or of such lesser periods as the
LICENSOR may specify, fairly presenting the costs (including capital costs),
revenue and financial position of the LICENSEE'S business and including a
reasonable assessment of the assets employed in and liabilities attributable to
the LICENSEE's business.

(b)      procure in respect of each of those accounting statements prepared in
respect of a financial year or part thereof of the LICENSEE, a report by the
LICENSEE's Auditor stating whether in his opinion that statement is adequate for
the purposes of the condition; and

(c)      deliver to the LICENSOR a copy of each of the accounting statements not
later than six months after the end of the period to which they relate.

         In this condition: the "Auditor" means the LICENSEE's auditor for the
time being appointed in accordance with the requirements of the Companies' Act,
1956.

13.6     PERFORMANCE BANK GUARANTEE (PBG):

         A performance bank guarantee of Rs.2.00 crores for category 'A' Service
Area, Rs.20.00 lakhs for each category 'B' service Area and Rs.3.00 lakhs for
each category

                                       29
<PAGE>

'C' Service Area valid for two years from any Scheduled Bank in the prescribed
form (Schedule 'D' of the draft Licence Agreement) shall be submitted along with
the application for each service area. The licensee will be able to extend the
validity of Performance Bank Guarantee two months prior to its date of expiry on
its own without demand from the Licensor for a further period of one year on
year to year basis. On any failure to do so which failures shall amount to the
breach of this Licence, the performance bank guarantee will be encashed without
giving any notice. This is without prejudice to any other action that may be
taken under the terms and conditions of the licence.

13.7     LICENSOR, without prejudice to its rights to any other remedies, is
free to encash the Performance bank Guarantee in part or in full, in case of any
breach of terms and conditions of the licence by the LICENSEE including
non-payment of licence fee etc.

13.8     Breach or non-fulfilment of licence conditions may come to the notice
of the LICENSOR through complaints or as part of regular monitoring. Wherever
considered necessary, LICENSOR will conduct an inquiry to determine whether
there has been any breach of the terms and conditions of the licence. The
LICENSEE will be given an opportunity of hearing before any action adverse to
his interest is taken.

         The LICENSOR shall decide in each case the penalty to be levied for any
breach of the terms and conditions of the Licensee. If the penalty is not
discharged or complied with, the LICENSOR has the right to encash, in part or in
full, the Performance Bank Guarantees.

13.9     CHARGES FOR NETWORK RESOURCES

         The LICENSEE shall also separately pay charges for network resources
provided to the Licensee on licensee's request by the BSNL/MTNL/VSNL/other
licensed service providers at rates applicable from time to time.

         CONDITION 14: SET OFF

         Any sum of money due and payable to the LICENSEE under this licence may
be appropriated by the Government or any other person or persons including
contracting through the Government of India and the same may beset off against
any claim of the Government or such other persons, for payment of a sum of money
arising out of this licence or under any other licence made by the LICENSEE with
the Government or such other person or persons including TELECOM AUTHORITY.

                                       30
<PAGE>

                                  SCHEDULE 'C'

         PART-III: COMPLIANCE STATEMENT

         This company, hereby, agrees to fully comply with all General,
Technical, Commercial and Financial terms and conditions of the Application
Form, Guidelines and General Information on Internet services and
amendments/clarifications issued by the Telecom Authority, without any deviation
and reservations.

         The company, hereby, agrees and undertakes to fully comply with all
terms and conditions stipulated in this Licence agreement without any deviation
and reservation.

         Signature of the authorised signatory of the operating company
(Licensee).

                                             For Videsh Sanchar Nigam Ltd.

                                                          Sd/-
                                                   Auth. Signatory

For and on behalf of M/s. Videsh Sanchar Nigam Ltd
                          ------------------------------
                             (Name of the Company)

                                       31
<PAGE>

                                  SCHEDULE 'D'

                     PROFORMA FOR PERFORMANCE BANK GUARANTEE

To

The President of India
Acting through the Telegraph Authority

         In consideration of the President of India acting through the Telegraph
Authority (herein after referred to as 'the Authority') having agreed to grant a
licence to M/s                                    of
              -----------------------------------    ---------------------
(hereafter called the 'LICENSEE') to establish, maintain and operate Internet
service (hereinafter called 'the SERVICE') on the terms and conditions contained
in the said Licence, which interalia provides for production of a Bank Guarantee
to the extent of Rs                       (
                   ----------------------- -------------------------------------
in words) for the service by way of security for the due observance and
performance of the terms and conditions of the said licence we
                                                              ------------------
(indicate the name and address and other particulars of the Bank) (hereinafter
referred to as 'the Bank') at the request of the LICENSEE hereby irrevocably and
unconditionally guarantee to the Authority that the Licensee shall render all
necessary and efficient services which may be required to be rendered by the
LICENSEE in connection with and /or for the performance of the said LICENSEE and
further guarantees that the service which shall be provided by the LICENSEE
under the said licence, shall be actually performed in accordance with terms and
conditions of the LICENCE to the satisfaction of the Authority.

2.       We, the bank hereby undertake to pay to the Authority an amount not
exceeding Rs                 (Rupees                                      only)
            -----------------       --------------------------------------
against any loss or damage caused to or suffered or would be caused to or
suffered by the Authority by reason of any breach by the said LICENSEE of any of
the terms and conditions contained in the said licence.

3.       We, the bank hereby, in pursuance of the terms of the said licence,
absolutely, irrevocably and unconditionally guarantee as primary oblige and not
merely as surety the payment of an amount of Rs            (Rupees         only)
                                               ------------       ---------
to the Authority to secure due and faithful performance by the LICENSEE of all
his /their obligations under the said Licence.

4.       We, the bank hereby also undertake to pay the amounts due and payable
under this guarantee without any demur, merely on a demand from the Authority
stating the amount claimed is due by way of loss or damage caused or would be
caused to or suffered by the Authority by reason of breach by the said LICENSEE
of any of the terms or conditions contained in the said Licence or by reason of
the LICENSEE's failure to perform any of its obligations under the said Licence.

                                       32
<PAGE>

5. We, the bank, do hereby agree that the decision of the Authority as to
whether the licensee has failed to or neglected to perform or discharge his
duties and obligations as aforesaid and/or whether the service is free from
deficiencies and defects and is in accordance with or not of the terms and
conditions of the said Licence and as to the amount payable to the Authority by
the Bank hereunder shall be final and binding on the Bank.

6.       WE, THE BANK, DO HEREBY DECLARE AND AGREE that:

(a)      the Guarantee herein contained shall remain in full and force and
effect for a period of two years from the date hereof and that if shall continue
to be enforceable till all the dues of the Authority and by virtue of the said
Licence have been fully paid and its claims satisfied or discharged or till
Authority satisfies that the terms and conditions of the said licence have been
fully and properly carried out by the said LICENSEE and accordingly discharged
this guarantee.

(b)      the Authority shall have the fullest liberty without our consent and
without affecting in any manner our obligations hereunder to vary any of the
terms and conditions of the said Licence or to extend time of performance of any
obligations by the said LICENSEE from time to time or to postpone for any time
or from time to time any of the powers exercisable by the Authority against the
said LICENSEE and to forbear or to enforce any of the terms and conditions
relating to the said Licence and we shall not be relieved from our liability by
reason of any variation or extension being granted to the said LICENSEE or
forbearance act or omission on the part of the Authority or any indulgence by
the Authority to the said LICENSEE or to give such matter or thing whatsoever
which under the law relating to sureties would but for this provision, have
effect of so relieving us.

(c)      any claim which we have against the LICENSEE shall be subject and
subordinate to the prior payment and performance in full of all the obligations
of us hereunder and we will not without prior written consent of the Authority
exercise any legal right or remedy of any kind in respect of any such payment or
performance so long as the obligations of us hereunder remains owing and
outstanding.

(d)      This guarantee shall be irrevocable and the obligations of us herein
shall not be conditional of any prior notice by us or by the LICENSEE.

                                       33
<PAGE>

7.       We the BANK undertake not to revoke this Guarantee during its currency
except with the previous consent of the Authority in writing.

Dated                        day                     for
     ------------------------   --------------          ------------------------
                                                           (name of the Bank)

witness:

1                                  2
 --------------------------         -----------------------------

---------------------------         -----------------------------

---------------------------         -----------------------------

                                       34
<PAGE>

                          VIDESH SANCHAR NIGAM LIMITED
                              SHAREHOLDING PATTERN

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
 NO.                       CATEGORY                                        HOLDING (31.03.2002)
-------------------------------------------------------------------------------------------------

                                                                        SHARES              % AGE
-------------------------------------------------------------------------------------------------
<S>      <C>                                                           <C>                 <C>
A.       PROMOTER'S HOLDING (INDIAN/FOREIGN)
-------------------------------------------------------------------------------------------------
1        Promoters/Central Govt. Including Nominees of                  74446885            26.12
         President of India (Indian)
-------------------------------------------------------------------------------------------------
2        Panatone Finvest Limited (Indian)                              71250000            25.00
-------------------------------------------------------------------------------------------------
         Sub -Total                                                    145696885            51.12
-------------------------------------------------------------------------------------------------
B.       NON-PROMOTERS HOLDING
-------------------------------------------------------------------------------------------------
3        Institutional Investors
-------------------------------------------------------------------------------------------------
3(a)     Mutual Funds and UTI (Indian)                                   3601409             1.26
-------------------------------------------------------------------------------------------------
3(b)     Banks, Financial Institutions, Insurance                       16649432             5.84
         Companies  (Central/State
         Govt. Institutions/Non-Government
         Institutions) (Indian)
-------------------------------------------------------------------------------------------------
3(c)     FIIs/ADR/Foreign Banks (Foreign)
-------------------------------------------------------------------------------------------------
         I. FIIs (Foreign)                                              24153416             8.47
-------------------------------------------------------------------------------------------------
         II. ADR (Foreign)                                              59853902            21.00
-------------------------------------------------------------------------------------------------
         III. Foreign Banks (Foreign)                                      52195             0.02
-------------------------------------------------------------------------------------------------
         SUB-TOTAL                                                     104310354            36.60
-------------------------------------------------------------------------------------------------
4        OTHERS
-------------------------------------------------------------------------------------------------
4(a)     Private Corporate Bodies (Indian)                               8798521             3.09
-------------------------------------------------------------------------------------------------
4(b)     Indian Public (Indian)                                         19266684             6.76
-------------------------------------------------------------------------------------------------
4(c)     NRIs/OCBs (Foreign)                                             6920174             2.43
-------------------------------------------------------------------------------------------------
4(d)     Any other (NSDL in Transit) (Indian)-                              7382             0.00
-------------------------------------------------------------------------------------------------
         SUB-TOTAL                                                      34992761            12.28
-------------------------------------------------------------------------------------------------
         GRAND TOTAL                                                   285000000           100.00
-------------------------------------------------------------------------------------------------
</TABLE>

                                       35

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00043-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00043-of-00352.parquet"}]]