Govt may drop riders for 74% FDI in telecom

NEW DELHI: Facing divergent views on putting riders for allowing 74% foreign direct investment in telecom companies, the government is likely to keep in abeyance its earlier decision mandating that companies only have Indians in the top management besides banning remote access to networks located abroad.

A decision on the issue will be taken by the Union cabinet at its meeting on Friday. The restrictions were put on security grounds after the Left and the intelligence agencies insisted on the clauses for the move to raise the FDI cap from 49% to 74% to go through.

While the GSM industry comprising players like Bharti Airtel and Hutch Essar want Press Note 5 of 2005, which laid down the norms, to be scrapped, the move to keep the decision in abeyance indefinitely has been prompted by the wrangling between ministries on the best way forward.

There is also pressure from the US and the UK to do away with the restrictions. “The suspension will enable the telecom department to process applications in accordance with the policy prevailing before Press Note 5 was issued,” an official said.

While the PMO and the finance ministry favour that the norms should not be applicable for companies that have up to 49% FDI, the telecom department is against dilution of the norms.

In fact, DoT chose to ignore the PMO’s directive to rework the cabinet note to exempt companies like Tata Tele and Reliance from the provisions of Press Note 5 as they do not have 74% FDI.

Press Note 5 was to be originally applicable from March this year but was deferred by four months and subsequently by another three months. The latest deadline now expires of October 3.

The Celluar Operators Association of India has also sought more flexibility and wants the government to allow pyramid holdings.

Source- http://timesofindia.indiatimes.com

Bharti Airtel ranked among Best Performing Asian Companies

Bharti Airtel, India’s leading telecom service provider, has been ranked 13th among the best performing Asian companies by the BusinessWeek Magazine in the ‘The Asia BusinessWeek 50’ list. The Asia BusinessWeek 50 is an annual ranking of Asia’s best performing companies across all sectors.

The others in the list include Reliance Industries (17), Infosys (23), China Petroleum & Chemical (25), Yamaha Motor (45) Mitsubishi Corp (53) and Posco (70). The companies were ranked using a combination of financial measures for earnings and sales growth, plus return on assets and other benchmarks. Companies were evaluated over both one year and three year time frames.

Sunil Bharti Mittal, Chairman and Managing Director, Bharti Airtel Limited said, “Getting featured among the Asia’s best companies is a proud moment for all of us. This highlights our relentless pursuit to create a world-class organisation that provides best in class services. It has been made possible by the committed efforts of the entire team at Bharti Airtel.”

This is what BusinessWeek said about Bharti Airtel “The company will spend $2 billion on network expansions and marketing to reach underserved markets in rural areas. That’s serious money—and a step toward Mittal’s broader ambition “to be the most admired brand in India by 2010.” Investors already like what they see. Bharti Airtel delivered 30% total shareholder returns in 2005, and a head-turning 493% over the last three years.”

Source- http://press-releases.techwhack.com

India Telecom Regulator Recommends 3G Service Guidelines -2-

Misra said he expects mobile phone operators to introduce 3G services in the country by June.
He said the highest bidder for each telecommunications zone will get to choose the best spectrum band, but the other four will have to offer a price no less than 25% lower than the highest bid.
Currently, companies such as Bharti Airtel Ltd. (532454.BY), Reliance Communications Ltd. (532712.BY), Tata Teleservices Ltd. (532371.BY). and Bharat Sanchar Nigam Ltd. (BSNL.YY). have a nationwide presence in the country.
India is divided into 23 telecommunications zones, or circles. The mobile operators in the country offer their services using either global system for mobile communications – GSM – or code division multiple access -CDMA -technology.
TRAI recommended that the spectrum for immediate allocation for 3G services should be in the 450 megahertz, 800 MHz and 2.1 gigahertz bands.
“As per present estimates, 32.5 MHz of spectrum will be available in a time scenario of six to nine months for 3G services.”
Chairman Misra said TRAI has suggested the setting up of a National Frequency Management Board to ensure availability of additional spectrum, its efficient utilization and plan for future requirement of spectrum.
TRAI has recommended that 3G should be a stand-alone service as it shouldn’t be considered an extension of the existing second-generation, or 2G, services.
Companies offering 3G services would also have to fulfill obligations regarding coverage in the urban and rural areas, said TRAI.
Earlier Wednesday, Telecommunications and Information Technology Minister Dayanidhi Maran said 3G services will play a vital role in development works such as delivering education electronically and tele-medicine, besides offering better voice and multimedia Internet content.
South Korea and Japan have already introduced 3G services, while China is also expected to soon introduce such services, he said.
Globally, there are around 60 3G networks in 25 countries.

Source- http://www.easybourse.com