The government has suffered a loss of Rs 12,488.93 crore (Rs 124.88 billion) due to under-invoicing of gross revenue by six telecom companies including Reliance Communications, Vodafone and Bharti Airtel, the CAG said in a damning report on Friday.
With their net debt estimated at Rs 1.15 trillion, the merged entity will not be in much of a position to dole out freebies, says Romita Majumdar.
Action is hotting up in the telecom space, with Russian giant Sistema in preliminary discussions with Aircel to pick up an equity stake.
Telecommunication companies buying airwaves in an Indian auction next month will pay 5 per cent of their revenue as an annual fee.
Toughens stand days before cooling-off period ends
Likely to seek FIPB approval to raise holding; deal could bring FDI of about $696 mn.
The finance ministry is likely to favour an approach that would take into account the payment capabilities of telecom companies while deciding the price and process for spectrum auction this year.
Taking a tough stand on the failure by mobile operators to verify subscriber documents, the government on Monday issued them directives to carry out special authenticity checks for bulk connections.
Telecom operator Bharti Airtel on Monday announced 20-25 per cent tariff hikes for various prepaid offerings, including tariffed voice plans, unlimited voice bundles and data top-ups, and said the new rates will come into effect from November 26. The entry-level tariffed voice plan has been raised by about 25 per cent, while for unlimited voice bundles, the increase in most cases is about 20 per cent. Sunil Mittal led telco -- whose India mobile customer base stood at about 323 million at the last count -- has also increased the tariffs for data top-up plans by about 20-21 per cent
Many say Tata Motors has perhaps paid the price for being too ambitious.
Decisions of the Telecom Regulatory Authority of India (Trai) have been under scrutiny for a while.
Already with a presence in Kenya's telecom sector through a brand called 'Yu', Essar is looking to strengthening its foothold in the rapidly growing African market.
The recent Indian telecom spectrum auction will hasten industry consolidation, strengthen tariffs and reduce regulatory risks.
A telcom operator said since there is a CBI investigation over alleged irregularties in the license and spectrum allotment going on, the minister may try to win over the industry by asking them not to be perturbed over the development and focus on operations and customers.
The income tax department has moved the Supreme Court stating that private telecom service providers are liable to deduct tax at source for the payments made to state-owned BSNL and MTNL for inter-connectivity.
In April, DoT introduced a graded penalty system under which operators pay Rs 50,000 per subscriber if more than 20 per cent of their user base is without valid identity documents.
Deconstructing the numbers shows companies have bid smartly to get the best deals.
Telenor of Norway and Sistema of Russia - on Friday asserted that they would take legal measures.
Filing an affidavit before the TDSAT, the department of telecommunication has requested the tribunal to dismiss the petition of telecom operators challenging the government directive to stop 3G roaming immediately.
Number of 3G subscribers in India is more than 12.2 million.
The Department of Telecommunications (DoT) on Thursday came out with a notification under which a UASL (Universal Access Service Licence) holder will have a lock-in period of three years or till the fulfilment of rollout obligations, whichever is earlier, before promoters can sell their equity stake.
Mittal said he discussed a plethora of issues with Commerce and Industry Minister Piyush Goyal and sought the government's support for faster clearances to streamline the group's investment plans.
Chiefs of leading telecom firms, including Sunil Mittal of Bharti Airtel, Anil Ambani of RCom and Vittorio Colao of Vodafone, met Telecom Minister Kapil Sibal on Wednesday and placed their views.
It has invested $2 billion and spent $200 million on its R&D centre in Bengaluru, the largest such centre outside China where some core technologies are under development.
Recently, world headlines buzzed with Elon Musk's announcement that he was shelving his audacious bid for social media platform Twitter. Away from the media spotlight, questions are being asked about the maverick billionaire's plans in India, too. A few days ago, a Reuters report said Musk's flagship Tesla had put on hold its plan to launch electric cars in India.
The 3G and broadband wireless access spectrum auction is running into further controversies with a section of telecom firms opposing the timing of the auction and internet companies planning to move the Prime Minister's Office.Even though Reliance Communications is ready with $1-billion investment for 3G rollout, it intends to focus on GSM rollout at the moment. The company is "receptive to the opinion that the 3G auctions should be held at a later date," a source said.
A total of 10.42 million wireless (GSM, CDMA and WLL) subscribers have been added during October 2008 against 10.07 million wireless subscribers added in September 2008, the Telecom Regulatory Authority of India said. The total wireless subscribers stood at 325.73 million at the end of October 2008.
Bharti's ratings headroom is likely to improve with an equity infusion, planned asset sales and growing EBITDA from Africa.
Home Ministry sources said all telecom operators in the country had been asked not to issue SIM cards without verification or in bulk.
Firms to pay Rs 24,700 cr if spectrum formula is accepted.
The central government, which is also party to the case, informed a bench of justices G S Singhvi and A K Ganguly that it is in favour of setting up a special court to try the accused in the 2G case and the law minister has written a letter to the Delhi high court chief justice asking him to constitute a court and identify a judge for this purpose.
DoCoMo's exit from Tata Teleservices highlights the struggle of smaller operators even as the outlook improves for bigger players.
Bharti Airtel chairman Sunil Mittal has expressed hope that the government and regulators will step in to ensure the sector remains a viable place for continued investments and asserted that the industry requires "long overdue" support to maintain its current 3+1 structure. In the latest annual report of Airtel, Mittal said as the sector's role in the economy becomes more pervasive, its challenges loom larger. Issues such as unsustainable pricing and low returns in a highly capital-intensive environment, coupled with legacy legal issues, "have extracted their toll", Mittal observed.
Weak balance sheets due to hefty outgo of funds for new licences will reflect negatively on the 2013 outlook for the sector.
Steep pre-paid tariff cuts at the start of the year in January could mean lower revenue growth for telecom operators in the March 2008 quarter. Moreover, minutes of usage (MOU) are unlikely to be very much higher since industry watchers feel users will take some amount of time to react to the tariff cuts. The operating profit growth these telcos could be in the region of 6-7 per cent. However, net profits may remain flat sequentially due to foreign exchange fluctuations.
While everybody is talking about the vast potential of 5G, the uptake of such services in India depends on operators getting around 100 Mhz 5G spectrum. At the reserve price proposed by Trai, getting this spectrum will cost a telco around Rs 490 billion. Which amount could be difficult for operators to mop up, given the financial stress they are undergoing, says Kiran Rathee.
Jio's spectrum trading pact with Airtel has enabled India's largest telco to top-up its holding in three key circles and yielded potential savings of about $400 million, according to a report. It is pertinent to mention here that Reliance Jio has signed an agreement with Bharti Airtel to acquire a portion of spectrum in 800 MHz band for Andhra Pradesh, Delhi and Mumbai circles at an aggregate value of Rs 1,497 crore -- marking the first such deal between the two telecom giants that otherwise compete fiercely in the market. Market analysts have termed the deal "mutually beneficial" and "win-win for both". UBS in a note cited Jio's spectrum buys in the 800 MHz band in Andhra Pradesh, Delhi and Mumbai in the recently-concluded auctions.
