DoT proposes tax breaks for 3G winners

26 Aug 2009, 0044 hrs IST, Kalyan Parbat & Joji Thomas Philip, ET Bureau at http://economictimes.indiatimes.com/DoT-proposes-tax-breaks-for-3G-winners/articleshow/4934677.cms.

KOLKATA: The Department of Telecommunications (DoT) will ask the empowered group of ministers (EGoM) on 3G-spectrum auction, headed by Finance minister Pranab Mukherjee, to consider a proposal under which successful bidders of pan-India 3G spectrum can enjoy tax benefits applicable under section 80-1A of the Income Tax Act.

The DoT’s rationale is that the 3G mobile broadband should be treated as a distinct infrastructure service and not continuity of telecom operations, especially in case of 2G service providers pitching for a pan-India 3G licence. The DoT will place the proposal during the second meeting of the EGoM scheduled for Thursday.

The proposal for tax benefits applicable under section 80-1A of the Income Tax Act is part of an internal note prepared by DoT that will be circulated to EGoM members, a senior DoT official told ET.

Currently, only telecom companies that kicked off operations between April 1, 1995 and March 31, 2000 enjoy income tax breaks under section 80-1A. If the EGoM were to accept the DoT proposal, it would imply that 3G operations of telecom companies will enjoy income tax breaks on 100% of their profits for initial five years. In the next five years, these telcos will enjoy a 30% tax break on their profits.

The DoT note to the EGoM also adds that Indian Space Research Organisation (ISRO) is of the view that it cannot spare any further airwaves for WiMax services. As reported by ET earlier this month, ISRO chief G Madhavan Nair had said that the Department of Space (DoS) has already parted with 40 MHz of airwaves for WiMax services in the 2.5 GHz band.

He said any interference from the WiMax services offered in this band in the future could “severely affect the very sensitive satellite services in the adjacent band”. Mr Nair had also added the DoS is now left with only 150 MHz of airwaves in the 2.5 GHz band, the bare minimum requirement for satellite services.

The DoT note to the EGoM was prepared by its joint secretary (T) and consists of demands from the industry, especially those of CDMA-based operators, and includes the views of the DoS on WiMax spectrum.

The EGoM is slated to settle all outstanding issues associated with the auction of 3G airwaves, vital for high-end services such as high-speed internet and video conferencing on mobiles.

It will take a final call on the reserve price for 3G and WiMAX spectrums and decide on the number of players to be allowed to offer these high-end services in each circle.

It is also learnt that the EGoM may also debate whether the government at all has the right to urge successful bidders of 3G spectrum to shell out an extra Rs 1,600 crore-plus for a separate pan-India UAS licence, especially when DoT knows only too well that there is no extra 4.4 MHz 2G spectrum available to bundle with new licences.

“At a time when the DoT’s wireless planning cell is well aware that it won’t be able to meet future 2G spectrum obligation for new UASL licencees, why should they be asked to shell out an extra Rs 1,600 crore plus full complement of the licence fees. While nothing has been finalised yet, a successful bidder of 3G spectrum, alternately, may also be asked to shell out a lower sum for a pure vanilla UASL without the bundled spectrum,” said a government official familiar with the matter.

Indications are that a section of E-GoM members are loathe to the idea of fixing the number of slots for 3G services to a maximum five (including BSNL) per service area. “Considering that, there are as many 11 to 9 slots available in some circles like Orissa and Madhya Pradesh, the E-GoM is likely to debate the rationale of uniformly restricting the number of slots (per circle) for delivery of 3G services. There is a feeling in the finance ministry that such restriction can tantamount to a loss of potential revenue for the government,” said a DoT official close to the developments.

News Digest: MyFM, RCOM, Shaadi, IRCTC, TringMe, Nokia, SBI, IRDA, FrontLine, Tejas, Swan, TechM

From http://www.medianama.com/2009/08/223-news-digest-db-groups-myfm-rcom-shaadicom-irctc-tringme-nokia-sbi-irda-frontline-tejas/ on August 25, 2009

By Preethi J

MyFM To Raise 15.2M

Synergy Media Entertainment Ltd, DB Group’s FM radio division, will raise Rs. 1.52 crore through preferential allotment of fully paid up equity shares. It has received approval from the Foreign Investment Promotion Board (FIPB). Synergy runs 94.3 MyFM in 17 cities.

Related: Dainik Bhaskar IPO Filing: Digital Kiosks; IndiaInfo.com; I Media Corp

RCOM Launches Antakshari

Reliance Mobile launched a new VAS – Antakshari -  on its R-World platform which will allow the subscriber to play antakshari with anyone. Charges are Rs.30 per month with 30 minutes free usage. This service is being launched on both GSM and CDMA networks. (TelecomIndia Online)

IRCTC’s Online Sales Boom

Around 34% of the 880,000 tickets sold daily by the Indian Railways are booked online, ticket sale data between April and July 2009 by the IRCTC reveals. This is not all – online booking of the tickets is also popular amongst low income groups. An thumping 63% of online tickets were booked by them. (Business Standard)

Our Take: IRCTC continues to be the poster boy of Indian e-commerce. We only wish it were more efficient – instead of spending hours standing in a queue, we now spend hours on the website – logging back in due to jittery timeouts and searching for train names and numbers.

Related: IRCTC Does $102 Million In Online Transactions In August; Payment Trends; HDFC, ICICI, Cash Cards Significant

TringMe

This Bangalore based 2007 startup has a platform that helps developers create voice-enabled widgets for the Internet. Tringme hosts some 22 million call minutes per month and expects this to soar to 40 million in the next 3-4 months. One of its clients is Indiamart. (Moneycontrol)

Our Take: Such a platform could spark off more apps and options in the VoIP domain – so far ruled by Skype and Fring. Ofcourse there is still the regulatory hurdle to cross before VoIP usage picks up.

Strike At Nokia’s Manufacturing Plant in TN

Nokia employees at its handset manufacturing factory in Sriperumbudur have demanded a wage increase of €21 for all employees. (Evertiq)

M-Banking Adoption
State Bank of India has added 20,000 mobile-banking customers in 2 months, taking the total to 33,000. M-banking is rising in popularity for small value transactions. (PTI)

All Mobile Banking posts

Shaadi.com Stats

The site has 300m page views a month. 6,000 new profiles are added every day. (Guardian)

Insurance Inst Opts For Online Exams

Complaints of malpractices has led the Insurance Institute of India to make entrance exams for insurance agents online. The institute will be aided in setting up the online examinations by NSEiT, a subsidiary of the National Stock Exchange and Insurance Regulatory and Development Authority. (ET)

HomeShop18 To Raise Funding

The retail TV channel and online site is in discussion with prospective financial and strategic partners to raise money in the next year. It has outlined three priorities – be visible in every television household; to invest in customer experience; and, to reward loyal customers. Network18 owns 65% of HomeShop18. (VCCircle)

PE Firm Frontline Strategy Picks Up Stake In Tejas

The amount and stake are not known, and the stake was picked up by Frontline through a secondary transaction. Tejas has been backed by Battery Ventures, Cascade Capital Management, Mayfield Fund, Intel Capital, Goldman Sachs and Sandstone Private Investments. (VCCircle)

Change In Regulations Deferred: DoT

International telcos in India have been dealt a poor hand by the Indian government. The Department of Telecom (DoT) has postponed plans to remove the double taxation they currently have to comply with for offering long distance calls. They pay license fees twice to the government – for bandwidth which they purchase off domestic operators and again when they resell it to enterprises and their customers. (ET)

Etilsalat Awards IT Contract To Tech Mahindra

Following the move by other telcos to outsource their IT operations, Etisalat DB, which runs new telco Swan Telecom (renamed to Etisalat DB Telecom India), may award the majority of its Rs 150 million outsourcing project to Tech Mahindra. (ET)

Other telco-IT company relationships are: Unitech Wireless – Wipro ; Idea Cellular – IBM ; Bharti Airtel – IBM; Aircel – Wipro

The Hindu Business Line : 3G auctions within 72 days of resolving pricing issue: DoT

via The Hindu Business Line : 3G auctions within 72 days of resolving pricing issue: DoT on June 18, 2009

Thomas K. Thomas

New Delhi, June 17

The Department of Telecom proposes to conduct auctions for third generation services spectrum within 72 days of resolving its differences with the Finance Ministry over pricing.

This was mentioned by the DoT in a recent presentation to high ranking government officials. However, the DoT will have to iron out the differences with the Finance Ministry first before it can set a date for the auctions.

Telecom Ministry officials said that expect the auctions to take place by September assuming that the policy issues are resolved.

Two issues

The DoT and the Finance Ministry differ primarily on two issues. One relates to the base price, with the Finance Ministry wanting it pegged at Rs 4,040 crore. The DoT wants it to be between Rs 2,020 crore and Rs 3,500 crore to keep the spectrum affordable.

The other difference is the number of slots to be auctioned. While the DoT wants eight operators to be given 3G spectrum, the Finance Ministry favours five.

The DoT officials said that the issues will be resolved since the Prime Minister has included the auction of 3G and broadband spectrum in his agenda for the first 100 days.

Sources said that another round of meeting between the Union Telecom Minister, Mr A. Raja, and the Finance Minister, Mr Pranab Mukherjee, will take place to arrive at a resolution.

The DoT officials said the issues will be sorted out before the Budget is presented.

The Hindu Business Line : Import of mobile handsets without IMEI number banned

via The Hindu Business Line : Import of mobile handsets without IMEI number banned.

Huge impact on grey market phones.

Our Bureau

New Delhi, June 17 In a move that could signal the end of grey market mobile phones, the Government on Wednesday banned import of all handsets without the International Mobile Equipment Identity (IMEI) number.

IMEI is a unique 15-digit code that identifies a mobile. It prevents the use of stolen handsets for making calls and allows security agencies to track down a specific user. However, a majority of handsets sold in the grey market do not come with the IMEI, which has is of concern for security agencies.

The Government move to ban handsets without the code will hit a number of Chinese and Taiwanese manufacturers that were flooding cheap handsets in the grey market. The move will have no impact on the 25 million cellular users who already have bought a handset without IMEI. The ban is applicable only on new handsets being imported into the country.

The Director-General of Foreign Trade issued the notification on Wednesday imposing the ban with immediate effect.

Welcoming the decision, Mr Pankaj Mohindroo, President, Indian Cellular Association, said, “This is a step in the right direction to throttle handset grey market. However, much more needs to be done to tackle this menace. We are working with the Government in this regard.”

To protect consumers who have already bought handsets without the IMEI number, the Cellular Operators Association of India has tied up with Mobile Standard Alliance of India to set up 1,600 retail outlets across the country to provide the IMEI number on handsets without one. It is estimated that there are 25 million subscribers across the country using handsets without the IMEI number. Concerned over the national security, the Department of Telecom had earlier asked operators to disconnect services to handsets that do not have the IMEI number by April 15. However, the COAI, representing the GSM industry, has developed a software that will provide the unique number to instruments that do not have it.

The solution is being implemented with the approval of the DoT and the security agencies. Subscribers who do not avail themselves of this facility will be disconnected by the operators after June 30.

Related stories at

• http://efytimes.com/efytimes/fullnewsxml.asp?edid=35220
• http://www.ciol.com/technology/mobility/news-reports/india-bans-mobile-handsets-without-imei/18609121163/0/
• http://timesofindia.indiatimes.com/India/Govt-bans-import-of-Chinese-mobiles/articleshow/4668458.cms

DoT seeks Rs 3000 cr support for BSNL- Telecom-News By Industry-News-The Economic Times

17 Jun 2009, 0302 hrs IST, Joji Thomas Philip, ET Bureau

NEW DELHI: The communications ministry has sought an allotment of Rs 3,000 crore from the finance ministry for supporting BSNL’s wireline networks that were set up before April 2002. The DoT wants the amount to be sanctioned in the budget.

This is to compensate the state-owned telco for losses during the last fiscal after telecom regulator Trai had done away with access deficit charge regime from April 1, 2008. Prior to that, all telcos were paying 0.75% of total revenues towards ADC, which was used to support BSNL’s unviable fixedline operations in rural India. In 2007-08, BSNL got Rs 2,000 crore as ADC.

But, when hanging up on ADC, the regulator in a bid to address the concerns of BSNL , which had warned that it would be forced to discontinue all its rural fixed-line operations if the levy were to go, recommended that the government give it a subsidy of Rs 2,000 crore per annum for the next three years from the Universal Obligation Fund (USOF).

All telcos pay 5% of total revenues towards the USOF, which is dedicated to improving communication facilities in rural India. Unutilised amount in the USOF is at over Rs 20,000 crore. In March 2009, BSNL and DoT had signed an MoU to provide the state-owned operator a subsidy of Rs 6,000 core over the next three years from this fund to sustain its rural operations.

In fact, BSNL had even dragged the regulator to the telecom tribunal, but the latter refused to issue a stay on the matter. Trai had however, justified its move to do away with the ADC regime on the grounds that the total support provided to BSNL over the last couple of years under various initiatives which includes reimbursement of licence fee and spectrum charges, moratorium on payment of interest, support from Universal Service Obligation Fund(USOF), ADC funding and exemption on entry fee was about $8 billion (Rs 31,500 crore), while adding that the PSU cannot be supported in perpetuity.

In a bid to give further relief to BSNL, last year, DoT also exempted telcos from paying licence fee on fixedline telephony from licence fee enabling the state-owned operator to save Rs 1,200 crore annually.

via DoT seeks Rs 3000 cr support for BSNL- Telecom-News By Industry-News-The Economic Times.

Telcos’ wait for airwaves gets longer

17 Jun 2009, 0702 hrs IST, Joji Thomas Philip & Sandeep Gurumurthi, ET Now

The wait for additional airwaves, key for mobile operators to expand their customer base, has just got longer, with the telecom ministry deciding to make any decision on this only after the upcoming auction of third-generation spectrum, according to a top official in the department of telecom (DoT).

Communications minister A Raja and Finance Minister Pranab Mukherjee met twice on Tuesday, but were unable to reach a consensus on key issues related to 3G auctions such as the base price for these radio frequencies as well as the number of players to be allowed to offer these high-end services.

“No consensus as of now on the base price. We discussed various suggestions — whether we should go for uniform base price or opt for differential pricing, according to circle, depending upon commercial viability of that area,” Mr Raja told reporters after his second meeting with Mr Mukherjee.

As a fallout, the telecom ministry has decided that it will take a call on all issues related with second-generation spectrum, the airwaves on which all mobile services are offered at present, including the methodology for future allocations, the pricing for this scarce resource and the usage charges for utilising these airwaves only after the upcoming auctions of third generation spectrum, the official said on condition of anonymity.

The ministries are divided over the base price for the 3G auctions with DoT proposing a reserve price of Rs 2,020 crore for pan-India 3G spectrum and the finance ministry wanting it to be doubled. DoT has said it is open to hiking the reserve price to Rs 3,540 crore as a compromise.

The two ministers said for the first time that they were willing to look at a differential pricing formula to arrive at a base price for 3G auctions, vital for high-end services such as video conferencing and high-speed internet on the mobiles.

Industry analysts, however, say using a new formula to arrive at differential pricing for each circle will be a time-consuming process that will further delay the 3G auctions.

The development implies that existing telcos will not get 2G spectrum till the issue is settled. Now, they will have to invest heavily on infrastructure to ensure that the quality of services do not deteriorate.

At present, all telecom services are offered on 2G spectrum and these airwaves have been given to telcos based on their subscriber numbers. Put simply, additional radio frequencies are dished out as telcos as they add more subscribers. Currently, India follows a controversial practice of allocating spectrum based on companies’ subscriber base, and is the only country in the world that follows this method.

There are two key factors that have led to the communications ministry deciding to stop all 2G allocations until the completion of 3G auctions.

First, the spectrum panel in its report submitted last month had said the country should adopt the internationally-accepted auction system for issuing additional 2G airwaves to telcos. This committee, consisting of academicians, industry representatives, government officers and industry representatives, had suggested that the 2G pricing be market-linked and be related to the auction price of 3G spectrum.

Second, the committee had also suggested that all telcos who hold radio frequencies beyond the 6.2 MHz mark be charged a one-time fee for all the extra radio frequencies they hold, while adding that this one-time fee be calculated based on the 3G auction price.

The communications ministry can act on these recommendations only after the 3G auctions take place.

The larger implication is that all telcos will have to shell out huge amounts, both for the excess 2G radio frequencies they hold as well as for all additional allocations in the future.

Additionally, DoT’s move to freeze all 2G allocations is also set to impact all telcos. For instance, India’s largest telco, Bharti Airtel, is awaiting additional spectrum allotment of 1 MHz each in five circles.

Reliance Communications, which has start-up spectrum in all 22 circles in the country, is now eligible for the next tranche in six circles as it has reached the prescribed subscriber numbers in these areas. Other telcos such as Vodafone Essar and Idea Cellular too are awaiting additional spectrum in several circles.

With no airwaves allotments over the next couple of months, these operators will have to spend significant amounts in setting up new cellsites. Analysts say for most operators, it is, therefore, a tradeoff between increased capex and allowing the quality of services to deteriorate on account of the spectrum crunch.

This is because it is technically possible to have increased number of subscribers using the same amount of radio frequencies, provided operators spend significant amounts in building more base stations and subscribing to the latest technological innovations.

It is not just the large players that are impacted by the latest policy logjam. The government’s move to put all allocations on hold will also pinch small players and new entrants like Datacom, Unitech Wireless

and Swan Telecom, who are awaiting start-up spectrum in many regions.

No consensus on 3G reserve price: Raja- Hindustan Times

From The Hindustan Times on June 16, 2009

No consensus has been reached between the Department of Telecommunications (DoT) and the finance ministry on the reserve price for third generation (3G) radio waves auction, Communications Minister A Raja said in New Delhi on Tuesday.

Raja, who met Finance Minister Pranab Mukherjee on Tuesday in New Delhi to discuss issues related to 3G spectrum auction, told reporters that the reserve price matter would be discussed with Prime Minister Manmohan Singh.

The final decision will be taken by the Group of Ministers (GoM) and the Cabinet Committee of Economic Affairs, he added.

The DoT plans to auction radio frequencies for the country’s 20 of 22 telecom service areas.

The process has been delayed a number of times after the finance ministry suggested that the starting auction price of Rs.2,020 crore be doubled.

via No consensus on 3G reserve price: Raja- Hindustan Times.

Raja expects minimum Rs 25,000 cr from 3G, BWA spectrum bids- Telecom-News By Industry-News-The Economic Times

Raja expects minimum Rs 25,000 cr from 3G, BWA spectrum bids

From http://www.economictimes.com on 16 Jun 2009, 1617 hrs IST, PTI

NEW DELHI: Telecom Minister A Raja on Tuesday said that he expects revenue of at least Rs 25,000 crore from the auction of radio waves for third generation (3G) mobile, broadband and wireless services.

Raja, who met Finance Minister Pranab Mukherjee, said his department had assured the government of an early service rollout.

“In connection with the 3G and WiMAX auctions, we assured (the Finance Minister) of an early rollout, an early auction and more revenue for the government,” Raja told reporters after meeting Mukherjee earlier today.

Raja’s estimate is lower than what (Rs 30,000 crore) the government had forecast last year when the 3G auction process was announced.

Raja meets Mukherjee again in the evening seeking clarity on the number of licences to be auctioned and the reserve price to be set. DoT officials will also be there to discuss the issue with their counterparts in the Finance Ministry.

DoT plans to auction frequency for 20 of India’s 22 telecom service areas. The exercise has been delayed after the Finance Ministry suggested that the starting auction price of Rs 2,020 crore be doubled.

via Raja expects minimum Rs 25,000 cr from 3G, BWA spectrum bids- Telecom-News By Industry-News-The Economic Times.

2G allocation: DoT to seek more time

Thomas K Thomas in The Hindu Business Line on June 13, 2009

New Delhi, June 12 The Department of Telecom will seek more time from the telecom tribunal to decide on the policy for allocating 2G spectrum for mobile operators.

The deadline to decide on the policy is today, according to a judgment given by the Telecom Dispute Settlement Appellate Tribunal in its order of March 31, 2008.

The tribunal had asked the DoT to finalise the policy one month after the spectrum committee submits its report. Since the spectrum panel submitted its proposals on May 13, the DoT would have to take its final decision by June 13, according to the directions of the TDSAT. The DoT had, therefore, put on hold fresh allocation of spectrum till the policy was finalised.

However, the DoT has taken a view that it needed more time to review the recommendations of the committee, which mooted sweeping changes in the way spectrum is allocated.

Differences over policy

There are differences between the spectrum panel and the Communications Ministry on the policy. While the panel suggested giving spectrum through an open auction, the Telecom Ministry is in favour of continuing with the existing subscriber-linked criteria. “Since it is not possible to take a final decision with one month in view of wide ranging implications and report being reformist in nature we may request TDSAT to grant more time for Government decision on the report,” said a top DoT source.

The DoT also plans to consult the telecom regulator before it takes a final view on the allocation procedure. Earlier, top Ministry sources had told Business Line that the panel’s report may not be acceptable since it will disturb the level playing field in the mobile segment between new and old players.

DoT sources said it will decide on spectrum allocation criteria within six weeks. This means that operators such as Bharti Airtel and Reliance Communications, which have sought additional spectrum in some of the circles, will have to wait till then.

DoT willing to hike 3G bid price

12 Jun 2009, 0126 hrs IST, Joji Thomas Philip & Sandeep Gurumurthi, ET Now

NEW DELHI: The communications ministry is set to tell the Union Cabinet that it is open to increasing the reserve price for the auctions of pan-India third generation (3G) spectrum to Rs 3,540 crore and auction up to eight slots of 3G spectrum. As per the existing 3G policy unveiled by the communications ministry late last year, the reserve price for pan-India 3G spectrum is Rs 2,020 crore and accommodating five players per circle.

The department of telecom is of the view that hiking the reserve price for these airwaves will ensure that the finance ministry does not put up any fresh roadblocks for the upcoming 3G auctions, which is vital for high-end services such as video conferencing and high speed internet on mobile handsets. Spectrum is the airwaves on which telecom signals travel and is the lifeline for all telcos.

This comes as the Union Cabinet is set to consider the proposal for the auction of radio bandwidth for third-generation (3G) mobile services within the next two weeks, rather than routing it through a group of ministers (GoM), fast-tracking the much-delayed process.

The DoT will also tell the Cabinet that the total number of players who will be allotted 3G spectrum can be raised from the current five to about seven to eight per circle. The move is aimed at addressing the concerns of the finance ministry which fears that a lower base price would result in the government failing to meet its targets of raising about Rs 40,000 crore for these auctions.

Increasing the number of slots will lead to higher revenues from the auctions as this will enable more Indian operators and also players from abroad to bag these airwaves. At the same time, the DoT in its note to the Cabinet will also state that even as it open to hiking the reserve price, it prefers to retain the base price at 2,020 crore as specified under the existing 3G policy.

The DoT’s logic behind the Rs 3,540 crore figure is that it is between the Rs 2,020 crore suggested by the DoT and the and the Rs 4,040 crore demanded by the finance Ministry. The DoT has arrived at this figure (Rs 3,540 crore) by doubling the reserve price for Delhi, Mumbai and category A circles and increasing it 1.5 times for Kolkata and category B circles retaining the current base price for category C circles, according to a top executive in the communications ministry.

As per the 3G policy, the base price for metros and category A circles such as Tamil Nadu and Maharashtra is Rs 160 crore, while that for category B circles is 80 crore and Rs 30 crore for Category C regions totalling up to Rs 2,020 crore. The cabinet may look into the proposal within two weeks, communications and IT minister A Raja had told ET on Wednesday after meeting Prime Minister Manmohan Singh. “The communications ministry has already prepared a Cabinet note detailing all issues associated with the 3G auctions. We plan to present this note to the Cabinet soon,” Mr Raja had added.

If the Cabinet approves the ministry’s proposal in its current format, the 3G auctions will be held within three months, opening the gates for high-end services such as video-conferencing and high speed internet on mobile handsets. On the other hand, routing the process through a GoM would involve a delay of several months since there will have to be a consensus between all ministers of the group before it can be sent to the Cabinet.

Earlier this year, the communications ministry had sought Cabinet approval for 3G auctions, but the latter could not clear the same as the finance ministry had objected to this proposal and demanded that the floor price be doubled. Further, differences between several ministries over the floor price for the auction of 3G airwaves and also over the number of players to be allowed to offer these high-end services in an area had forced the Cabinet to refer the matter to a group of ministers just prior to the general elections.

The auctions could not be held prior to the polls as GoM failed to meet to find a solution to these issues. In fact, the GoM did not even meet once to discuss the 3G auctions. The issue then got further complicated as the planning commission, the department of industrial policy and promotion and the IT ministry opposed doubling of the base price.

Related stories at:

• http://www.ciol.com/technology/networking/news-reports/dot-set-to-hike-3g-auction-price/12609120894/0/
• http://economictimes.indiatimes.com/DoT-willing-to-hike-3G-bid-price-/articleshow/4646736.cms

Chennai unit top producer for nokia

12 Jun 2009, 0210 hrs IST, Kalyan Parbat, ET Bureau

KOLKATA: Chennai has edged past China as a unit-wise volume producer of Nokia cellphones. In fact, Nokia’s Chennai factory is now the company’s largest cellphone manufacturing facility in the world.

China has two such Nokia factories and Chennai one. But Chennai Nokia has now edged past the larger of the two Chinese factories. While the Finnish cellphone maker is not revealing the annual capacity of its Chennai factory, a senior member of its global planning team said the factory is now indeed its largest manufacturing factory. Unofficial reports suggest Chennai manufactures over 100 million phones every year.

Interestingly, over 70% of Nokia’s 8,000-strong employee pool at the Chennai plant are women, involved in a mix of running productions lines, maintenance and assembly and testing operations.

Nokia operates state-of-the-art mobile phone manufacturing units in India, Finland, China, Korea, Mexico, Brazil, Romania and Hungary. “The Chennai factory is the largest in Nokia’s global ecosystem, although the dynamics in terms of product line vary in each market. But the international markets that we serve out of Chennai have seen the largest growth in volume terms.

At present, Nokia ships GSM phones from the Chennai factory to over 50 markets spanning South East Asia Pacific (including Australia), India, the Middle East and Africa,” said a senior official who did not wish to be named.

When contacted, a Nokia India spokesman said: “As a company policy, we do not share specific capacity numbers of our factories worldwide. All I can confirm at this stage is that our Chennai operation has seen the fastest ever ramp-up across our nine cellphone manufacturing plants. The ramp-up is in terms of the unprecedented growth in cellphone production volumes within a three-year span.”

The latest development is seen as a milestone of sorts for the Finnish cellphone maker and is in sync with its plans to take big strides to grow the Indian handset turf. It also comes at a time when the world’s top cellphone makers, under the ambit of the Indian Cellular Association, are targeting a national production volume of 250 million mobile handsets by calender 2012.

Several presentations have been recently made to the Department of Telecommunications by the manufacturing advisory committee. The larger objective of players like Nokia, Samsung, Motorola and Spice is the creation of an additional 1 lakh jobs during 2009-14 in cellphone manufacturing, assembly, R&D and design.

While Nokia churns out a dazzling mix of GSM phones in India, the first camera phone to be manufactured at the Chennai works was the Nokia 2630 while the first music phone was the Nokia 5130. It does not manufacture CDMA phones in India as yet.

DoT, FinMin close to settle differences over 3G

The Financial Express on June 11, 2009

New Delhi: Differences over the 3G spectrum auction reserve price between the the Department of Telecom and the finance ministry is being sorted out to push the bidding in a faster pace.

“We are yet to arrive at the exact bid price but it could be between Rs 2,020 crore-Rs 4,040 crore, the two respective reserve prices quoted by DoT and the finance ministry respectively,” a senior DoT official said.

Market conditions are gradually improving. We will settle at a price which is acceptable to both the ministries, which could be about Rs 3,000 crore but the Cabinet has to give its approval for the rate, said the official.

The government plans to get Rs 30,000 crore upwards out of the 3G spectrum auction.

There is a good possibility, if everything woks out as per schedule drawn by the Department, that the auction could kick off in September-end or early October, said the official.

Since we had approached Cabinet once and it is a major policy decision, we will take it up to the Cabinet again, he said.

Telecom Minister A Raja had earlier said 3G services would start by the end of this year.

Related stories at

• http://economictimes.indiatimes.com/DoT-FinMin-close-to-settle-differences-over-3G-issues/articleshow/4646274.cms

3G Rollout: Raja meets PM; discloses agenda for 3G roll out

Source PTI, From Hindustan Times on 11 June 2009

Setting the ball rolling for 3G mobile telephony, Telecom and IT Minister A Raja today met Prime Minister Manmohan Singh and discussed the agenda for launching the much-awaited services and auction of spectrum.

Official sources said that Raja met Singh in the morning and briefed him about the ongoing issues, including roll-out of 3G and wireless broadband (Wimax) services.

The Department of Telecom (DoT) has to decide on the reserve price for spectrum as it had differences with Finance Ministry. The matter may be taken directly to the Cabinet Committee on Economic Affairs (CCEA) or will be referred to a Group of Ministers (GoM).

DoT had proposed a reserve price of Rs 2,020 crore for an all-India spectrum of five MHz, while the Finance Ministry had pegged it at around Rs 4,040 crore.

Asked whether the reserve price of spectrum came up for discussion between Raja and Singh, sources said the minister mentioned about the number of players to be considered for 3G in the first round of auction of spectrum and its pricing.

Raja had earlier told PTI that he would like to start the process of auctioning of spectrum within three months and roll out the services by the end of this calendar year.

3G allows users access to high-speed data and voice services. State-run BSNL and MTNL are the only two operators to offer this next generation service in the country, while private players are awaiting spectrum to be apportioned.

Related stories at

• http://www.financialexpress.com/news/raja-meets-pm-discloses-agenda-for-3g-roll-out/474318/
• http://economictimes.indiatimes.com/Cabinet-to-take-a-call-on-3G-auctions-soon/articleshow/4642138.cms

DoT, FinMin close to settle differences over 3G issues

11 Jun 2009, 2256 hrs IST, PTI on www.economictimes.com

NEW DELHI: Differences over the 3G spectrum auction reserve price between the the Department of Telecom and the finance ministry is being sorted out to push the bidding in a faster pace.

“We are yet to arrive at the exact bid price but it could be between Rs 2,020 crore-Rs 4,040 crore, the two respective reserve prices quoted by DoT and the finance ministry respectively,” a senior DoT official said.

Market conditions are gradually improving. We will settle at a price which is acceptable to both the ministries, which could be about Rs 3,000 crore but the Cabinet has to give its approval for the rate, said the official.

The government plans to get Rs 30,000 crore upwards out of the 3G spectrum auction.

There is a good possibility, if everything woks out as per schedule drawn by the Department, that the auction could kick off in September-end or early October, said the official.

Since we had approached Cabinet once and it is a major policy decision, we will take it up to the Cabinet again, he said.

Telecom Minister A Raja had earlier said 3G services would start by the end of this year.

Ministry may dump spectrum panel’s proposal on 2G auction

Thomas K. Thomas on The Hindu Business Line on June 11, 2009

 New Delhi, June 10 The Communications Ministry is likely to reject the recommendations made by the Spectrum Committee to auction spectrum for GSM-based cellular services and favour maintaining status quo on the existing subscriber-based allocation criteria.

The Ministry is also not for capping start-up spectrum for new players at 4.4 Mhz, as proposed by the panel set up by the Department of Telecommunications (DoT). The panel, headed by the Additional Secretary, Mr Subodh Kumar, had suggested sweeping changes in the spectrum allocation policy including scrapping the existing subscriber base criteria.

Highly placed officials in the Ministry of Communications told Business Line, “While we are in favour of auctioning 3G and WiMax spectrum as soon as possible, radio frequency for 2G mobile service cannot be auctioned as it is illegal. It is unfair to ask new players to take part in an auction when some of the existing players have got spectrum based on the subscriber criteria,” the official said.

Pay for addition

However, the Ministry is likely to price additional spectrum beyond 6.2 Mhz derived from the fee paid by operators during the fourth cellular bidding process. “We are considering a formula whereby operators with more than 6.2 Mhz will have to pay a one-time fee derived from the amount paid by the fourth cellular operator for the 4.4 Mhz,” the official said.

If this formula is accepted then existing players such as Bharti Airtel and Vodafone will have to pay at least Rs 375 crore for each unit of spectrum beyond 6.2 Mhz.

The Ministry will take a final view on these proposals after consulting the telecom regulator. The spectrum panel had suggested freezing all allocation of spectrum at current levels. It had suggested that spectrum should be auctioned and existing players should pay a one-time fee based on the amount collected during the auction for third generation mobile services.

Related story at

• http://www.ciol.com/technology/networking/news-reports/dot-puts-2g-allocation-on-hold/11609120851/0/
• http://economictimes.indiatimes.com/DoT-puts-2G-allocation-on-hold/articleshow/4642382.cms

Huawei may bid for majority stake in ITI

Thomas K Thomas on The Hindu Business Line

New Delhi, June 8 Chinese telecom vendor Huawei may be one of the interested bidders for picking up stake in the factories owned by State-run Indian Telephone Industries Ltd. Huawei told Business Line that it was open to discussing opportunities for strengthening relationship with the Indian manufacturing company for whom the Department of Telecom will invite bids from strategic partners.

When contacted, a Huawei India spokesperson did not rule out the possibility of acquiring ITI. “Huawei India already has a strong and successful tie-up with ITI for transmission network for the Indian market, and is open to further discussion for more collaboration with business partners and governments in developing the local telecom industry, including local manufacturing in India. The specific plan is yet to be finalised by our parent company,” the spokesperson said.

Alcatel Lucent could be the other interested party, but the company is yet to confirm their plans.

Both Huawei and Alcatel Lucent has had a strategic partnership in the past for supplying mobile equipment to BSNL. Both these companies are also strong in the WiMax and IP-based telecom equipment market for which ITI’s existing factories can be used. However, if Huawei does bid for a stake in ITI’s factories it may have to deal with the security concerns raised against Chinese vendors by the Intelligence Bureau.

3 SPVs planned

 The Government is proposing to set up three special purpose vehicle companies for divesting stake in three of the six manufacturing plants owned by ITI. The three plants are located in Rae Bareli, Nainital and Bangalore and is involved in producing WiMax modems and optical transmission equipment. DoT plans to invite private players to pick up majority stake in the range of 51 per cent to 74 per cent in each of the three SPVs.

To start off the process, DoT on Monday invited expression of interest from global consultants to act as advisors to the Government. The consultant will be finalised by end of June.

Related stories at

• http://www.thehindubusinessline.com/2009/06/09/stories/2009060951130400.htm

Number portability: Trai to seek views on tariff

8 Jun 2009, 0227 hrs IST, ET Bureau

NEW DELHI: Telecom regulator Trai will float a consultation paper this week seeking views of stakeholders and experts on fixing tariffs for the mobile number portability service, which will be available after September.

“We will issue a consultation paper next week on the port and dipping charges of mobile number portability (MNP) service … We will have to see the service is affordable to customers,” Trai chairman J S Sarma said.

Subscribers can change their 10-digit mobile number without changing the service providers by October when mobile number portable services start. As per DoT roadmap, MNP services is to take off by September 20.

In most of the countries where MNP is prevalent, the subscribers are not charged for availing the service. Domestic service providers say they need to recover the huge amount of cost they will put in the MNP infrastructure of their network.

Sarma said afford ability will be a key consideration for MNP service and Trai has to ensure that. There is forbearance in telecom tariffs but Trai is the ultimate authority of the tariff related issues. MNP tariffs would be decided by Trai, he said. As per DoT’s roadmap for MNP service schedule, Trai will decide on all kinds of tariffs related to MNP, like the transaction fee to be charged from the customer for seeking change of number.

Sources said number portability charges are likely to be below Rs 300 and it will take maximum two days to change the service provider.

India defence loosens hold on spectrum

From www.ciol.com on June 8, 2009

NEW DELHI, INDIA: India’s defence ministry has agreed to release 45 MHz of wireless radio spectrum, the Business Standard reported, a move that will help fast-growing mobile telecoms firms reeling under shortage of radio waves.

The defence ministry had signed an accord with the telecoms ministry to immediately release 10 MHz spectrum for third-generation (3G) mobile services and 5 MHz for the dominant 2G services.

The remaining would come in a phased manner, taking the total to 25 MHz for 3G and remainder for 2G, according to timelines agreed by the two ministries, it said, without saying where it got the information from.

A spokesman for the telecom ministry could not be immediately reached.

Separately, the Mint newspaper, quoting an unnamed telecoms ministry official, said defence forces had agreed to free up spectrum over the next three years in a phased manner. It did not say how much spectrum they would vacate.

Related stories at

• http://economictimes.indiatimes.com/India-defence-agrees-to-release-spectrum-Report/articleshow/4630179.cms

Mobile players back proposal for spectrum sharing

The Hindu Business Line on June 8, 2009

Our Bureau

New Delhi, June 7 Cellular operators are backing a proposal suggested by the Department of Telecom’s spectrum committee to allow sharing of radio frequency. Spectrum sharing will allow operators to pack in more subscribers and mobile traffic in the given bandwidth.

According to the spectrum panel an operator with 4.4 Mhz of spectrum will be able to support around 12 erlang of traffic per base station (roughly equivalent to 300 users talking simultaneously).

But if two operators, with 4.4 Mhz each, share their spectrum then they will be able to support 77 erlang (equivalent to 1,900 users) on a single base station. By doubling the amount of spectrum the efficiency levels go up by more than six times.

The higher the better

The efficiency levels increase if the quantum of shared spectrum is higher. For example, if two operators with 6 Mhz share their spectrum they will be able to handle over 100 erlangs (close to 2,500 users) on each base station, compared to just 37 erlang if they offer services without sharing.

“Sharing of spectrum can be beneficial when there are pockets in a region where an operator does not have spectrum or has less spectrum. Sharing makes economic sense only when the full spectrum is shared between the operators in a service area. It should therefore be permitted only when two or three GSM or CDMA operators share their entire spectrum holding in a licence area,” the panel said.

GSM operators say that the panel’s recommendations bolster their longstanding view that dividing spectrum into small portions reduces efficiency levels drastically. “Spectrum sharing will enable operators to have enough bandwidth to accommodate the growing subscriber base,” said a GSM player.

Minimum spectrum

The CDMA players, however, want the DoT to ensure that everyone gets 6.2 Mhz of spectrum under the current subscriber linked criteria and then allow sharing of spectrum. “If DoT wants to permit spectrum sharing on radio frequency that has been acquired through an auction process, then we are fine with that. But they should first make sure that new players get at least 6.2 Mhz and then go for auction,” says Mr S.C. Khanna, Secretary, Association of Unified Telecom Services Providers of India.

Government is keen to offload stake in TCIL

7 Jun 2009, 1242 hrs IST, PTI on www.economictimes.com

NEW DELHI: The government is keen to divest its holding in another telecom PSU — Telecom Consultants India Ltd — along with BSNL, whose management has been asked to start talks with the employee unions.

“Divesting equity of government holding in TCIL through Initial Public Offer (IPO) route and listing of its shares on stock exchange,” was one of the agenda discussed internally by the new government.

TCIL, which also holds 30 per cent stake in Rajasthan mobile operations controlled by Sunil Mittal-promoted Bharti Airtel, is believed to be keen on divesting its stake in the Rajasthan circle.

A Cabinet note has already been prepared for divesting TCIL’s stake in Bharti-Hexacom (a joint venture for Rajsthan operations) and a decision is expected soon.

The Department of Telecom (DoT) had earlier proposed to invite market bids for TCIL’s 30 per cent stake in Bharti- Hexacom and also Bharti had evinced interest in buying TCIL’s holding.

On BSNL, the note said the agenda is sale of government holding in the company through IPO route and listing of BSNL shares on the stock exchange.

Other than these two, DoT is looking to go for divestment of its shares in another PSU — the loss-making equipment vendor ITI where it has already invited Expression of Interests from the prospective bidders.