Spice valued at Rs 6,800 crore; TMI to get 14.99% in Idea.
India's fifth largest mobile phone company, Idea Cellular, today said it has agreed to buy BK Modi's 40.8 per cent stake in Spice Communications in an all-cash deal worth Rs 2,700 crore, including non-compete fees. The deal values Spice at around Rs 6,800 crore.
Idea will buy Spice Group's shares at a price of Rs 77.30 a share — a premium of 42 per cent to Tuesday's closing price — and make the mandatory open offer to Spice shareholders at the same rate. Spice's minority shareholders, who want to remain invested in the telecom industry and do not tender shares during the open offer, will be offered Idea Cellular shares at a later date.
Reacting to the announcement, Spice shares surged 33.1 per cent to a record close of Rs 72.35 in a market that rose 0.8 per cent. Idea was up 2 per cent at Rs 102.05 a share.
Idea will add about 4.5 million customers, closing in on Bharat Sanchar Nigam Ltd, the fourth-largest carrier. Besides, it will enter Punjab and Karnataka, which account for 11 per cent of India's total wireless subscribers.
"It will give us incumbent advantage in both these circles. We are now in the big league of telecom players in the country," Idea Chairman Kumar Mangalam Birla said here today.
According to the complex agreement, TM International (TMI), the Malaysian telecommunication giant holding 39.2 per cent stake in Spice, will swap its stake for Idea shares and will be offered 469 million shares by way of a preferential allotment of shares in Idea at a price of Rs 156.96 a share. This will take TMI's stake in idea to 14.99 per cent.
TMI will invest Rs 7,500 crore for buying this stake in Idea Cellular and a part of these funds will be used to buy Modi's stake. The balance Rs 4,500 crore will be used to retire the debts in Idea's books, Birla said. TMI will get one seat on Idea's board.
Thursday, June 26, 2008
Monday, June 23, 2008
Advani snubs Ranbaxy deal
Profit motives shouldn't override national interests, says BJP leader at the Business Standard annual awards function.
The Ranbaxy-Daiichi deal may have made global headlines, but that has hardly impressed L K Advani, leader of the Opposition, Lok Sabha.
"It's a cause for worry that an Indian company, known for its research & development capabilities and operating in a critical area like pharmaceuticals, has lost its identity to a foreign company," Advani said after giving away the Business Standard awards at a glittering function attended by a galaxy of business leaders in Mumbai on Saturday evening.
Though he did not name Ranbaxy, the signal from the Bharatiya Janata Party's (BJP's) prime ministerial candidate was clear.
Advani said he was aware that mergers and acquisitions were inevitable in a globalised world, but asked Indian industry to spare a thought for what he called the "third dimension".
"I am not trying to find fault with globalisation and profit motives. But these cannot override considerations of national interests," the BJP leader said, adding India Inc should guard against a monopoly situation in vital areas like pharmaceuticals.
"We need to think how such deals affect our poor people; and whether they can block access to drugs at a reasonable price," he said.
Ranbaxy promoters Malvinder Singh and family had sold their 34.81 per cent stake in India's largest pharmaceuticals company to Japan's Daiichi-Sankyo a fortnight ago. Daiichi has announced an open offer to take its stake in Ranbaxy to 51 per cent.
In his extempore speech, Advani also talked about the paradoxes in the Indian economy and stressed the need to make economic growth truly inclusive.
"India is seeing the fastest increase in the number of billionaires. But the plight of the poor is also deepening at an even faster pace. The challenge is to evolve an economic strategy which can bridge this ever-widening gap," Advani said.
The main reason for this paradox, Advani said, was the failure of successive governments and industry to recognise the fact that farmers were still not part of the economic growth process. "The root of the problem is the crisis in agriculture," he said.
Advani said India's software prowess was a matter of pride but the real challenge was to take information technology from urban areas to the countryside because that's what inclusive growth is all about.
The BJP leader said he agrees with management thinker C K Prahalad who has exhorted Indian industry to give serious thought to the value at the bottom of the pyramid.
"A whole new world will open up if we stop seeing the poor as victims or as a burden and start recognising then as resilient and creative entrepreneurs and value-conscious consumers," Advani said.
The veteran leader also didn't miss an opportunity to take a dig at the United Progressive Alliance government (UPA). Terming it as a government "in the ICU", Advani said the government has pushed itself in a corner over the Indo-US nuclear deal and the high inflation rate.
People certainly expected better management of the nation's economy from Manmohan Singh, who is known to be a distinguished economist, he said. "I am not a doctor. But here is the case of a doctor who has brought his own government to this critical pass," Advani said, giving flashes of his trademark humour.
Pointing out that the UPA government has written its own epitaph even before its formal exit, Advani blamed the coming together of the Congress and the Left on the bogus claim of unity of secular forces.
That the UPA has sealed its fate on the nuclear deal is evident from the fact that the Communists will withdraw support if the government goes ahead with operationalisation of the deal. On the other hand, if it once again chooses to retreat, the prime minister's credibility and authority, which were never high, will have all but evaporated, Advani said.
Convinced that Indians are now looking beyond the UPA government, Advani listed the challenges the next government would face: inflation, further acceleration and broadbasing of economic growth so that the fruits are enjoyed by the poorest, internal security threats and energy security.
Giving some indication of his party's economic manifesto for a "resurgent India", Advani said the agenda will be a strong and vibrant economy, revitalisation of agriculture, fixing the ills of small enterprises, a revolutionary expansion of high-quality education and a strong emphasis on urban renewal, specially for cities like Mumbai.
"We would like to evolve an Indian model of development as imitating the development model of any other country cannot solve India's problem," Advani said.
The CEO of the Year award was given to Sun Pharmaceuticals Chairman and Managing Director Dilip Shanghvi. Receiving the award, Shanghvi said the secret of Sun's success lay in its consistent ability to give the best pharma solutions at the lowest possible cost. Dedicating the award to his R&D team, he said Sun spends 12 per cent of its turnover on research.
O P Bhatt, chairman of State Bank of India, who received the Banker of the Year award, thanked Team SBI for its efforts to "wake up the SBI elephant from its slumber and make it dance."The Most Innovative Organisation of the Year award went to the Board of Control for Cricket in India (BCCI) for the Indian Premier League, which redefined the rules of the game.
Receiving the award, BCCI Vice-President Lalit Modi said it was a pleasant surprise for him as BCCI was not a company. He thanked his team, the 99 million TV audience and the over 2.5 million people who went to the cricket stadiums day after day to make IPL a grand success.
The award for the Equity Fund Manager of the Year was won by Sandeep Kothari of Fidelity Fund Management., while the honour of the Debt Fund Manager of the Year went to Suyash Chowdhary, a former fund manager at Standard Chartered Asset Management and now with HSBC Asset Management.
National Thermal Power Corporation won the Star PSU of the Year award, Cognizant Solutions was declared the Star Unlisted Company, Mico-Bosch won the Star MNC award and Praj Industries won the Star SME award.
Hyundai i10 won the BS Motoring Car of the Year award and Bajaj XCD 125 DTS-Si was chosen the BS Motoring Bike of the Year.
The Ranbaxy-Daiichi deal may have made global headlines, but that has hardly impressed L K Advani, leader of the Opposition, Lok Sabha.
"It's a cause for worry that an Indian company, known for its research & development capabilities and operating in a critical area like pharmaceuticals, has lost its identity to a foreign company," Advani said after giving away the Business Standard awards at a glittering function attended by a galaxy of business leaders in Mumbai on Saturday evening.
Though he did not name Ranbaxy, the signal from the Bharatiya Janata Party's (BJP's) prime ministerial candidate was clear.
Advani said he was aware that mergers and acquisitions were inevitable in a globalised world, but asked Indian industry to spare a thought for what he called the "third dimension".
"I am not trying to find fault with globalisation and profit motives. But these cannot override considerations of national interests," the BJP leader said, adding India Inc should guard against a monopoly situation in vital areas like pharmaceuticals.
"We need to think how such deals affect our poor people; and whether they can block access to drugs at a reasonable price," he said.
Ranbaxy promoters Malvinder Singh and family had sold their 34.81 per cent stake in India's largest pharmaceuticals company to Japan's Daiichi-Sankyo a fortnight ago. Daiichi has announced an open offer to take its stake in Ranbaxy to 51 per cent.
In his extempore speech, Advani also talked about the paradoxes in the Indian economy and stressed the need to make economic growth truly inclusive.
"India is seeing the fastest increase in the number of billionaires. But the plight of the poor is also deepening at an even faster pace. The challenge is to evolve an economic strategy which can bridge this ever-widening gap," Advani said.
The main reason for this paradox, Advani said, was the failure of successive governments and industry to recognise the fact that farmers were still not part of the economic growth process. "The root of the problem is the crisis in agriculture," he said.
Advani said India's software prowess was a matter of pride but the real challenge was to take information technology from urban areas to the countryside because that's what inclusive growth is all about.
The BJP leader said he agrees with management thinker C K Prahalad who has exhorted Indian industry to give serious thought to the value at the bottom of the pyramid.
"A whole new world will open up if we stop seeing the poor as victims or as a burden and start recognising then as resilient and creative entrepreneurs and value-conscious consumers," Advani said.
The veteran leader also didn't miss an opportunity to take a dig at the United Progressive Alliance government (UPA). Terming it as a government "in the ICU", Advani said the government has pushed itself in a corner over the Indo-US nuclear deal and the high inflation rate.
People certainly expected better management of the nation's economy from Manmohan Singh, who is known to be a distinguished economist, he said. "I am not a doctor. But here is the case of a doctor who has brought his own government to this critical pass," Advani said, giving flashes of his trademark humour.
Pointing out that the UPA government has written its own epitaph even before its formal exit, Advani blamed the coming together of the Congress and the Left on the bogus claim of unity of secular forces.
That the UPA has sealed its fate on the nuclear deal is evident from the fact that the Communists will withdraw support if the government goes ahead with operationalisation of the deal. On the other hand, if it once again chooses to retreat, the prime minister's credibility and authority, which were never high, will have all but evaporated, Advani said.
Convinced that Indians are now looking beyond the UPA government, Advani listed the challenges the next government would face: inflation, further acceleration and broadbasing of economic growth so that the fruits are enjoyed by the poorest, internal security threats and energy security.
Giving some indication of his party's economic manifesto for a "resurgent India", Advani said the agenda will be a strong and vibrant economy, revitalisation of agriculture, fixing the ills of small enterprises, a revolutionary expansion of high-quality education and a strong emphasis on urban renewal, specially for cities like Mumbai.
"We would like to evolve an Indian model of development as imitating the development model of any other country cannot solve India's problem," Advani said.
The CEO of the Year award was given to Sun Pharmaceuticals Chairman and Managing Director Dilip Shanghvi. Receiving the award, Shanghvi said the secret of Sun's success lay in its consistent ability to give the best pharma solutions at the lowest possible cost. Dedicating the award to his R&D team, he said Sun spends 12 per cent of its turnover on research.
O P Bhatt, chairman of State Bank of India, who received the Banker of the Year award, thanked Team SBI for its efforts to "wake up the SBI elephant from its slumber and make it dance."The Most Innovative Organisation of the Year award went to the Board of Control for Cricket in India (BCCI) for the Indian Premier League, which redefined the rules of the game.
Receiving the award, BCCI Vice-President Lalit Modi said it was a pleasant surprise for him as BCCI was not a company. He thanked his team, the 99 million TV audience and the over 2.5 million people who went to the cricket stadiums day after day to make IPL a grand success.
The award for the Equity Fund Manager of the Year was won by Sandeep Kothari of Fidelity Fund Management., while the honour of the Debt Fund Manager of the Year went to Suyash Chowdhary, a former fund manager at Standard Chartered Asset Management and now with HSBC Asset Management.
National Thermal Power Corporation won the Star PSU of the Year award, Cognizant Solutions was declared the Star Unlisted Company, Mico-Bosch won the Star MNC award and Praj Industries won the Star SME award.
Hyundai i10 won the BS Motoring Car of the Year award and Bajaj XCD 125 DTS-Si was chosen the BS Motoring Bike of the Year.
Friday, June 20, 2008
Double digit inflation hits India
The rate of inflation in India has galloped to a 13-year high to 11.05 per cent for the week ended June 7, confounding the worst fears of the United Progressive Alliance Government as general elections loom. This has been caused mainly by the June 5 increases in fuel prices and its cascading effect on all food commodities and other manufactured items, such as consumer durable goods and steel.
The unexpected spurt in the wholesale price index-based inflation from 8.75 per cent in the previous week evoked sharp criticism from all political parties, including the UPA’s coalition partners and Left allies, of the government’s failure to hold the price line and sustain the benefits of high growth.
Reserve Bank of India data show that the last time inflation was in double digits was in April-May 1995 when it ruled above 11 per cent.
The unexpected spurt in the wholesale price index-based inflation from 8.75 per cent in the previous week evoked sharp criticism from all political parties, including the UPA’s coalition partners and Left allies, of the government’s failure to hold the price line and sustain the benefits of high growth.
Reserve Bank of India data show that the last time inflation was in double digits was in April-May 1995 when it ruled above 11 per cent.
Tuesday, June 17, 2008
Leyland stakeholders may get equity in Nissan JV
Chennai-based Ashok Leyland (ALL), India's second-largest commercial vehicle maker, said today that it is evaluating the option of letting its shareholders invest in the joint venture companies with Nissan through a proper funding route.
Leyland is looking to raise Rs 600 crore for the joint venture facility located near Chennai, which is the equity participation of the company for the combined investment of about Rs 2,400 crore. Nissan will pump Rs 600 crore as equity, while the balance of about Rs 1,200 crore will be raised through debt.
K Sridharan, CFO, Ashok Leyland, said: "We are looking at prospects of (our) shareholders participating in the JV with Nissan. We aim to raise part or full amount of our equity participation in the joint venture for which we may look to incentivise our shareholders by providing them with some kind of entitlement." The official was speaking at an analyst meet here.
The company so far has not yet decided on the means to raise the required funding but stated that it was considering a preferential share issue, rights issue or convertible bonds, which will lead to scaling down of Ashok Leyland's holding in the three joint ventures.
Leyland is looking to raise Rs 600 crore for the joint venture facility located near Chennai, which is the equity participation of the company for the combined investment of about Rs 2,400 crore. Nissan will pump Rs 600 crore as equity, while the balance of about Rs 1,200 crore will be raised through debt.
K Sridharan, CFO, Ashok Leyland, said: "We are looking at prospects of (our) shareholders participating in the JV with Nissan. We aim to raise part or full amount of our equity participation in the joint venture for which we may look to incentivise our shareholders by providing them with some kind of entitlement." The official was speaking at an analyst meet here.
The company so far has not yet decided on the means to raise the required funding but stated that it was considering a preferential share issue, rights issue or convertible bonds, which will lead to scaling down of Ashok Leyland's holding in the three joint ventures.
Tuesday, June 10, 2008
Sensex crashes by 506 points
The rising concern over oil prices and inflationary pressures hit the stock markets again and the benchmark Bombay Stock Exchange (BSE) 30-share sensitive index (Sensex) lost 506.08 points or 3.25 per cent at 15066.10. Realty stocks are the major losers with 7.38 per cent drop followed by IT (4.21 per cent), oil and gas (3.29 per cent) and bank (3.21 per cent).
On the National Stock Exchange, the broader 50-share Nifty lost 126.85 points to close at 4500.95 against the previous close of 4624.80.
Rising crude oil prices is a major concern for the stock markets and the price of oil ruled high on Monday too at $137.7 a barrel. It surged to an all time high of $139.12 last Friday. Further, an increase in U.S. unemployment rate dampened sentiment on the bourses in the U.S. and other parts of the world. The U.S. markets are deeply affected by fears of a recession amid investor worry over further credit tightening while home values deteriorate.
On the National Stock Exchange, the broader 50-share Nifty lost 126.85 points to close at 4500.95 against the previous close of 4624.80.
Rising crude oil prices is a major concern for the stock markets and the price of oil ruled high on Monday too at $137.7 a barrel. It surged to an all time high of $139.12 last Friday. Further, an increase in U.S. unemployment rate dampened sentiment on the bourses in the U.S. and other parts of the world. The U.S. markets are deeply affected by fears of a recession amid investor worry over further credit tightening while home values deteriorate.
BSNL slashes STD tariffs by 50 %
The Bharat Sanchar Nigam Limited (BSNL) on Monday announced a 50 per cent reduction in STD charges on its mobile and landline networks.
Effective from midnight on Tuesday, landline users would pay Rs.1.20 per minute as against Rs.2.40 for STD calls to all networks. Rural customers would pay 80 paise per minute for STD calls.
The charges for intra-circle calls to BSNL network were also reduced from Rs.1.20 per minute to 60 paise with an increased pulse rate of two minutes.For mobile phone customers, STD charges were cut to Rs.1.20 per minute for the same network and Rs.1.40 for other networks.
Roaming charges under the pre-paid and the post-paid services were also revised. The roaming charges for all incoming calls were reduced — to Re.1 per minute from Rs.1.75 for all incoming calls; to Re.1 from Rs.1.40 for local outgoing; and to Rs.1.50 from Rs.2.40 for outgoing STD. The monthly rental of ‘Super One India Plan’ was reduced substantially to Rs.299 from Rs.799.
“We have chalked out a number of attractive schemes for both post-paid and pre-paid subscribers offering highly competitive rates. We are also offering other schemes to give more value to our subscribers,” said BSNL Chairman and Managing Director Kuldeep Goyal.
The expansion of mobile network was on track and more than 3 crore new connections would be added within a year, he said. The BSNL has over 7.2-crore subscribers, including 3.6-crore mobile customers.
Mr. Goyal announced that attractive schemes were also being announced to increase broadband subscribers from 20 lakh to one crore by 2010.
Effective from midnight on Tuesday, landline users would pay Rs.1.20 per minute as against Rs.2.40 for STD calls to all networks. Rural customers would pay 80 paise per minute for STD calls.
The charges for intra-circle calls to BSNL network were also reduced from Rs.1.20 per minute to 60 paise with an increased pulse rate of two minutes.For mobile phone customers, STD charges were cut to Rs.1.20 per minute for the same network and Rs.1.40 for other networks.
Roaming charges under the pre-paid and the post-paid services were also revised. The roaming charges for all incoming calls were reduced — to Re.1 per minute from Rs.1.75 for all incoming calls; to Re.1 from Rs.1.40 for local outgoing; and to Rs.1.50 from Rs.2.40 for outgoing STD. The monthly rental of ‘Super One India Plan’ was reduced substantially to Rs.299 from Rs.799.
“We have chalked out a number of attractive schemes for both post-paid and pre-paid subscribers offering highly competitive rates. We are also offering other schemes to give more value to our subscribers,” said BSNL Chairman and Managing Director Kuldeep Goyal.
The expansion of mobile network was on track and more than 3 crore new connections would be added within a year, he said. The BSNL has over 7.2-crore subscribers, including 3.6-crore mobile customers.
Mr. Goyal announced that attractive schemes were also being announced to increase broadband subscribers from 20 lakh to one crore by 2010.
Sunday, June 8, 2008
Tata Motors` truck business may foot the bill for Nano loss
Tata Motors may charge the losses on its small car Nano, the world's cheapest car at Rs 1 lakh, against the profit it earns from selling trucks, according to industry analysts.
Chairman Ratan Tata has pledged to sell Nano, touted as the common man's car, at Rs 1,00,000 even though the cost of making and selling the car is expected to be higher because of rising steel, battery and other input prices. Tata Motors has formed a team to evolve a plan to keep the costs closer to the sale price.
"The challenge for Tata Motors is not to sell the car at Rs 1 lakh but to produce the car substantially below the Rs 1 lakh barrier so as to be profitable. With the recent skyrocketing increase in prices of raw materials it is next to impossible to maintain that limit. The company will look to counterbalance the heavy initial loss on Nano by margin gain on the commercial vehicle segment. The production numbers (of the Nano) will be considerably lower in the initial quarters", said a Mumbai-based auto analyst from one of the leading brokerage firm.
The car, which may be sold starting October, is expected to turn to profit in four years, automobile analysts who declined to be identified said. The car will be built at Tata Motor's plant in Singur, West Bengal.
The company intends to produce about 250,000 units of Nano's per annum in Phase I of expansion with a gradual increase to 350,000 units per annum in Phase II.
Chairman Ratan Tata has pledged to sell Nano, touted as the common man's car, at Rs 1,00,000 even though the cost of making and selling the car is expected to be higher because of rising steel, battery and other input prices. Tata Motors has formed a team to evolve a plan to keep the costs closer to the sale price.
"The challenge for Tata Motors is not to sell the car at Rs 1 lakh but to produce the car substantially below the Rs 1 lakh barrier so as to be profitable. With the recent skyrocketing increase in prices of raw materials it is next to impossible to maintain that limit. The company will look to counterbalance the heavy initial loss on Nano by margin gain on the commercial vehicle segment. The production numbers (of the Nano) will be considerably lower in the initial quarters", said a Mumbai-based auto analyst from one of the leading brokerage firm.
The car, which may be sold starting October, is expected to turn to profit in four years, automobile analysts who declined to be identified said. The car will be built at Tata Motor's plant in Singur, West Bengal.
The company intends to produce about 250,000 units of Nano's per annum in Phase I of expansion with a gradual increase to 350,000 units per annum in Phase II.
Friday, June 6, 2008
Mahindra chases Tata dream with small engine
Mahindra & Mahindra (M&M), the country's biggest maker of utility vehicles (UV), is developing a small engine for a smaller version of its UVs and replicate the Tatas dream of a small car, a company official said.
The company is developing an engine with a capacity ranging between 650cc and 750cc, said Hemant Luthra, president, Mahindra Systech. He declined to give more details. The Rs 28,500-crore group, which is partnering France's Renault to sell Logan, aims to expand presence in all the segments of the market. The Tata group's plan to sell the world's lowest-priced car has spurred many companies, including M&M, to follow in its footsteps.
Mahindra Bolero, powered by 2.5 litre engine, is priced at Rs 5.28 lakh. The utility vehicle is among the largest selling vehicles in rural India. Mahindra Logan, a mid-sized sedan, is powered by 1.4 litre petrol engine which is imported from France.
The company is developing an engine with a capacity ranging between 650cc and 750cc, said Hemant Luthra, president, Mahindra Systech. He declined to give more details. The Rs 28,500-crore group, which is partnering France's Renault to sell Logan, aims to expand presence in all the segments of the market. The Tata group's plan to sell the world's lowest-priced car has spurred many companies, including M&M, to follow in its footsteps.
Mahindra Bolero, powered by 2.5 litre engine, is priced at Rs 5.28 lakh. The utility vehicle is among the largest selling vehicles in rural India. Mahindra Logan, a mid-sized sedan, is powered by 1.4 litre petrol engine which is imported from France.
Thursday, June 5, 2008
Tata plans water brand to take on Coke, Pepsi
Tata Tea, which sold its stake in US-based Glaceau in last year, plans to begin selling a low-priced bottled water in the country through its unit Mount Everest Mineral Water (MEMW) to take on global rivals such as Coca-Cola and PepsiCo in the Rs 1,500-crore packaged drinking water market.
"We want to do it quickly,'' Pradeep Poddar, managing director and CEO, Mount Everest, told Business Standard. "The market is still very young and we can evolve it further through marketing new offerings."
The company may sell its bottled water brand for masses at rates lower than those offered by competitors Bisleri, PepsiCo and Coca-Cola, he said. "The challenge for us is developing a right technology."
"We want to do it quickly,'' Pradeep Poddar, managing director and CEO, Mount Everest, told Business Standard. "The market is still very young and we can evolve it further through marketing new offerings."
The company may sell its bottled water brand for masses at rates lower than those offered by competitors Bisleri, PepsiCo and Coca-Cola, he said. "The challenge for us is developing a right technology."
Tuesday, June 3, 2008
DoT to allow AT&T, DLF in 3G spectrum auction
As many as 342 aspirants, including AT&T, DLF and Deutsche Telecom-MoserBaer who failed to get new telecom licences in the last round, may get to bid for spectrum for launching next generation (3G) mobile services.
Department of Telecom (DoT) is understood to have mooted the proposal to allow those who had applied for licenses between September 25, 2007 and October 1, 2007, to participate in the next generation 3G mobile telephony services.
According to sources, DoT fears that if foreign players, who do not even have a licence, were allowed to participate in the 3G process, existing applicants may go to court and delay the entire process.
"If a non-licence holder gets 3G spectrum (radio frequency) on the basis of auction, it will be given a licence. There are 342 applications pending for grant of licence on first come-first served basis. These applicants may also go to court and delay the process," an internal note said.
However, DoT has also said that International Competitive Bidding, as suggested by Finance Ministry, would increase the competition and thus bring larger revenues during spectrum allocation, but this may pose legal hurdles.
DoT and telecom regulator TRAI have been at loggerheads over the issue of allowing foreign players in the 3G telephony with TRAI opposing the move saying their (foreign players) entry will be expensive and may result in higher tariffs.
Department of Telecom (DoT) is understood to have mooted the proposal to allow those who had applied for licenses between September 25, 2007 and October 1, 2007, to participate in the next generation 3G mobile telephony services.
According to sources, DoT fears that if foreign players, who do not even have a licence, were allowed to participate in the 3G process, existing applicants may go to court and delay the entire process.
"If a non-licence holder gets 3G spectrum (radio frequency) on the basis of auction, it will be given a licence. There are 342 applications pending for grant of licence on first come-first served basis. These applicants may also go to court and delay the process," an internal note said.
However, DoT has also said that International Competitive Bidding, as suggested by Finance Ministry, would increase the competition and thus bring larger revenues during spectrum allocation, but this may pose legal hurdles.
DoT and telecom regulator TRAI have been at loggerheads over the issue of allowing foreign players in the 3G telephony with TRAI opposing the move saying their (foreign players) entry will be expensive and may result in higher tariffs.
Monday, June 2, 2008
Videocon invests Rs 12,000 cr in telecom
Videocon promoted Datacom will invite bids next week for rolling out 70 million GSM mobile lines across the country, envisaging an investment of over Rs 12,000 crore in the next four years.
"We shall be releasing Request for Proposal (RFP) from telecom vendors for 70 million GSM lines. Our plan is to start rolling out network by August this year," Ravi Sharma, Managing Director of Datacom, a company led by Group Chairman Venugopal Dhoot, told PTI.
Videocon, which has a majority stake in Datacom, had earlier announced Rs 6,000 crore investment in the telecom business and it has now been doubled to Rs 12,000 crore.
Besides huge investment in the domestic telecom sector, Datacom is also looking for a footprint in the global market through a mix of stake acquisition in existing telecom companies or through greenfield projects.
The company is talking to a host of players globally through its international arm Thompson, Sharma said, adding that talks are in the initial stage and fructification of the deal may take some time. Datacom was awarded licenses in 22 circles recently and the government has already started allocating spectrum (radio frequency) in some of the circles.
The company has been given start-up 4.4 MHz spectrum in states of Kerala, Tamil Nadu, Andhra Pradesh and Karnataka and may also get frequency in Orissa and Kolkata soon.
"We shall be releasing Request for Proposal (RFP) from telecom vendors for 70 million GSM lines. Our plan is to start rolling out network by August this year," Ravi Sharma, Managing Director of Datacom, a company led by Group Chairman Venugopal Dhoot, told PTI.
Videocon, which has a majority stake in Datacom, had earlier announced Rs 6,000 crore investment in the telecom business and it has now been doubled to Rs 12,000 crore.
Besides huge investment in the domestic telecom sector, Datacom is also looking for a footprint in the global market through a mix of stake acquisition in existing telecom companies or through greenfield projects.
The company is talking to a host of players globally through its international arm Thompson, Sharma said, adding that talks are in the initial stage and fructification of the deal may take some time. Datacom was awarded licenses in 22 circles recently and the government has already started allocating spectrum (radio frequency) in some of the circles.
The company has been given start-up 4.4 MHz spectrum in states of Kerala, Tamil Nadu, Andhra Pradesh and Karnataka and may also get frequency in Orissa and Kolkata soon.
Subscribe to:
Comments (Atom)
