In what could give a big relief to new mobile players, the Department of Telecommunications (DoT) is unlikely to cancel 53 licences - as recommended by the Telecom Regulatory Authority of India (Trai) - for non-fulfilment of rollout obligations.
DoT has set up a committee to frame the proposed Act, which will have seven members with retired judge Justice Shivraj Patil as its chairman.
Finance ministry officials said they were scrutinising many deals, but the actual tax liability would depend on many factors, including the kind of payment (royalty, interest, stake sale) and the Double Tax Avoidance Agreement with the country where the foreign company was based.
This is part of the government's plan to raise Rs 40,000 crore (Rs 400 billion) from disinvestment in the current financial year.
The broad idea was endorsed by the DoT's internal panel in its report on the Telecom Regulatory Authority of India's recommendations last year on spectrum management and other licensing issues.
If June 2010 diesel price is taken as the base, then the increase is a mere 2 per cent. By contrast, petrol prices have gone up by 23 per cent in the same period.
The average revenue per user (ARPU) of the country's four new GSM operators who got licences in 2008 - Uninor, S-Tel, Videocon and Etisalat DB - was between Rs 8.50 and Rs 39 in the January-March quarter.
The move will require a one-time payment of Rs 4,000-5,000 crore (Rs 40-50 billion), for which DoT would give financial support, a senior official from the latter told Business Standard.
The project, estimated to cost Rs 2,500-3,000 crore, is to be jointly implemented with the Ceylon Electricity Board, the largest power company of Sri Lanka.
The telecom PSU plans to get back in black in two years; BSNL too has started discussions to lease out its towers.
Getting compensated for at least 90 per cent of losses without government subsidy appears difficult.
The government indecisiveness on petroleum price rise, coupled with late release of cash subsidy, has sent the borrowings of three government-controlled oil marketing companies to an all-time high of around Rs 118,000 crore (Rs 1,180 billion).
The idea is to reduce capital investments and improve profitability.
The scheme will be offered to 15,000 employees, or one-third of the workforce, in the current financial year.
The turnaround has been possible due to availability of domestic gas on priority.
Girish Chandra Chaturvedi (57), a 1977 batch Indian Administrative officer from the UP cadre, took charge as the new petroleum secretary on May 3.
Bharat Sanchar Nigam Ltd has started talks on synergising operations with Mahanagar Telephone Nigam Ltd, which offers telecom services in Delhi and Mumbai.
RGPPL has signed a power purchase agreement with the government of Daman and Diu for selling about 98 Mw of power from July.
Scheme likely to come into force by June or July this year; both PSUs have been losing revenues and market share.
Department of telecommunications has set up a committee to look into the issue of escalating cost for the project.
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