Cellular News
    
Date: 26/9/2004       
Consumer groups having telecom disputes can reach TDSAT       
Consumer groups can now seek redressal from the Telecom Disputes Settlement & Appellate Tribunal (TDSAT) if they have telecom related complaints between a group of consumers and a service provider. Individual complaints will not be entertained by TDSAT. This was revealed at a seminar on "Dispute Resolution Mechanism in Telecom Sector in India" organised by TDSAT in Mumbai.        
 
Date: 24/9/2004       
Nokia launches new business phone       
Nokia launched new smart phone Nokia 6670 which is positioned as a compact business tool that can fit into your pocket. A GSM camera phone, this will also have an optional wireless keyboard, available as an accessory. Bluetooth will enable the handset and keyboard to behave like a computer.       
 
Date: 24/9/2004       
FIPB clears Hutch equity restructuring       
The Foreign Investment Promotion Board (FIPB) has cleared the long pending restructuring proposal of Hutchison Max Telecom and put it before the finance minister for final approval. Finance minister P. Chidambaram's final approval is required because even though the direct foreign equity structure of the combined entity would be very much within prescribed FDI limits, indirectly it would go up to 74% if FDI in the holding companies of the merged entity is taken into consideration. It comes at a time when Mr. Chidambaram is trying to convince the Left parties on the need to liberalise foreign direct investment (FDI) in telecom.       
 
Date: 23/9/2004       
Reliance acquired CDMA licence in J&K       
Reliance Infocomm has acquired licence for providing CDMA based mobile services in Jammu and Kashmir. Currently, BSNL is the only mobile service provider in J&K. Airtel is expected to launch its services in the state in a month.       
 
Date: 23/9/2004       
DoT rejects TRAI's recommendation       
DoT has decided to reject TRAI's recommendation of excluding earnings from sale of handsets from the adjusted gross revenue (AGR) of the telecom companies. The annual revenue share of the government paid by the telecom operators is based on AGR. Telcos now pay 6-10% of AGR to the government as licence fee.       
 
Date: 22/9/2004
Philips launches new Philips 755
Philips India Limited, a subsidiary of the Netherlands-based Royal Philips Electronics and India's most respected company in the consumer durable sector now launches Philips 755 handset targetted at those who want a complete mobile experience. The new Philips 755 Tag-it with a 65K colour touch-screen comes with a Tag-it pen, a digital camera with zoom function and much, much more...
 
Date: 21/9/2004        
Ericsson to make base stations in India        
Ericsson, the Swedish telecom equipment manufacturer has decided to make cellular base stations in the country. Ericsson will make radio base stations (cell site equipment that includes transmitters and receivers, which enable communication with mobile handsets) at its existing facility near Jaipur, where it makes switching telecom equipment.The company will not make base stations from scratch but assemble and integrate them. Base stations make up more than half the total network cost of a service provider. Ericsson, which is a leading supplier of mobile networks to companies like Bharti, Bharat Sanchar Nigam Ltd. and Reliance in India, will start shipping base stations by the end of this year.        
 
Date: 21/9/2004        
STT &  Telekom Malaysia to acquire part of Tata stake in IDEA        
STT and Telekom Malaysia (TM), the new 33% partners in IDEA Cellular are learnt to have reached an agreement with the Tata and AV Birla groups for a partial buyout of their stakes in the company. The proposed buyout is part of the STT-TM combine's proposal to increase its stake in the company to 49%. The rest of the stake hike is proposed to be done through the preferential issue route. The Tatas and AV Birla groups currently hold 33% each in Idea Cellular. STT-MT combine is expected to invest an additional $200m in Idea Cellular, besides the $200m used to buy out AT&T's stake. Singapore-based information and communications company STT is a wholly-owned subsidiary of Singapore Technologies. Telekom Malaysia International is the overseas investment arm of Malaysia's communications company Telekom Malaysia Berhad.        
 
Date: 18/9/2004        
Nokia enjoys 58% market share         
Nokia has increased its share by about 2-3% during '04 in India's GSM mobile handset market.  Between January '04 and May '04, Nokia had a market share of 58.4%, while its closest competitor Samsung had a 14.7% share, followed by Motorola at 14.1% and Sony Ericsson at 7.1%, according to the figures available with market research agency ORG-GFK. The survey also reveals that smaller players like BenQ and Bird have seen a rise in sales, both in terms of volumes and value between February '04 and July '04, while bigger brands like Motorola, Alcatel and Siemens have reported a drop in sales.        

The value of the handsets sold from January '04 to May '04 stood at Rs.657.1 crore (12.8 lakh handsets) for Nokia; Rs.189.1 crore(3.2 lakh phones) for Samsung; Rs.131 crore (3.1 lakh phones) for Motorola and Rs.86 crore (1.5 lakh units) for Sony Ericsson.        

For phones falling in less than Rs.3,000 price band, Motorola is the leader with a 96% brand share (Nokia is not present in this segment). In the Rs.5,000-8,000 price band, Samsung is the leader with a 45% brand share, Nokia has about 24% share and Sony Ericsson has a 15% market share. Apart from these two price bands, Nokia has the dominant share at all other price points: Rs.3,000-4,000 (77%); Rs.4,000-5,000 (73%); Rs.8,000-15,000 (55%); over Rs.15,000 (68%). Samsung has a 21% and 25% brand share in the last two price bands.        
 

Date: 18/9/2004        
Telecom FDI hike decision deferred        
Finance minister Mr. P. Chidambaram said that the final decision on hiking the FDI (Foreign Direct Investment) ceiling for telecom would be taken in due course. The issue did not come up for discussion at the meeting of the Union Cabinet today. The relevant papers are being made ready by co-ordinating committee and the ministry concerned will have to send the papers.         

Raising its objections on FDI in telecom, aviation and insurance sectors, CPM had asked the government for answers to their objections before going ahead with the issue. Prime Minister Manmohan Singh is expected to take the final decision after weighing the arguments of all sections. While there were reports that differences persist between the finance and telecom ministries over the issue, IT & communications minister Dayanidhi Maran had said that the finance minister was the final authority on FDI and they did not have any differences on the issue.        
 

Date: 18/9/2004        
Airtel to add 1,000 towns by March 2005        
Airtel will add 1,000 more towns and 5,000 more base stations to its network this financial year as part of its Rs.2,000 crore capex for FY 04-05. With this Airtel would have around 10,000 base stations in the country. It also plans to install 18 more mobile switching centres, taking the total count to 53. The company has plans to soon become the first operator to be operational across all 23 circles in the country.  Airtel has 8.28 million mobile subscribers nation-wide. It has rolled out EDGE or enhanced data rate for GSM evolution services in Bangalore. EDGE provides 'broadband' internet connectivity at a maximum of 200 kilobits per second to users. It has plans to offer gaming, email (with attachments) and live TV.  The company has tie-up with Nokia to develop a limited edition EDGE-enabled phone. EDGE service would initially be available at Rs.600 for unlimited usage.         
 
Date: 17/9/2004         
Home ministry clears way for 74% telecom FDI        
In a recent communication to DoT, Union home ministry is understood to have withdrawn its earlier objections to raising the FDI limit in telecom companies to 74% on security grounds. This will help the government push through the increase in FDI. It is also likely to trigger a fresh round of controversy over FDI in telecom as both the Left and the RSS have been strongly opposing the move.         

Earlier this year when various security agencies under the home ministry, led by LK Advani then, had raised security concerns, the home ministry had written a note to the communications ministry, citing the objections raised. The Intelligence Bureau (IB), in a letter to the communications ministry had reiterated, "that telecommunication is too vital a national service with a critical role in the security of the nation and, therefore, there should be no dilution of the policy of FDI cap of 49%". The IB even wanted the government to review existing limits. "Even the current provisions, which permit foreign investment up to 49% through Indian investment companies, which results in an indirect investment of another 24.99%, should be reviewed to ensure that total foreign equity in the telecom sector either through FDI or FII investment should not exceed 49%," the IB had noted. The intelligence agencies, a few months back, even wanted the government to set up dedicated bodies to monitor security aspects in telecom services. This had forced the then NDA government to defer the decision on FDI.         
 

Date: 16/9/2004         
Bharti brings its all telecom services under Airtel brand         
Bharti Televentures limited has brought all its telecom services namely landline, broadband, long distance and cellular under a single brand, Airtel. Consequently, the BTVL's brands like Touchtel (landlines/broadband), IndiaOne (STD/ISD) and Internet (Mantra) will cease to exist and Airtel, long associated with the group's flagship cellular services, will extend to cover all the telecom operations Under unified branding strategy various services would be called as Airtel Mobile services, Airtel Telephone & Broadband services, Airtel Long Distance Services, Airtel Enterprise Services. According to Bharti officials the unified branding followed government policy to introduce unified licensing that allows cellular and landline companies to offer two services under the same licence, which were given out separately until recently.          
 
Date: 16/9/2004         
Reliance to invest Rs. 300 crore in Karnataka         
Cellular service provider Reliance Infocomm will invest Rs.300 crore in Karnataka by December to roll out into 260 towns in the state. Reliance is present in only 50 towns in Karnataka currently. With a base of 5.4 lakh subscribers in Karnataka, Reliance is second only to Airtel in Karnataka. But Reliance wants total coverage to be number one. Reliance Infocomm is also setting up 70 more Web World Express outlets, in the state out of which 32 will be in Bangalore.         
 
Date: 10/9/2004            
1-sec plan receives good response            
One-second billing plan offered by some cellular operators recently has been well received by the subscribers. Within the first seven days of launch, BPL Mobile has roped in over 50,000 new subscribers in the four circles where it operates. Over 2 lakh existing subscribers of BPL Mobile migrated for the new pulse rate. Over 10,000 calls were received by the call centre on the first day of the launch of the new plan.             

The operators feared that one-second pulse rate would result in a drop in minutes of usage (MoUs). But BPL Mobile’s experience has been otherwise. The MoU has grown by 5% during the first seven days. Currently, the average minutes of usage for the industry is in the region of 10m minutes per day, including incoming and outgoing calls. The ratio of incoming to outgoing calls is 65:35 on an average. The plan is attractive since consumers pay only for the air-time that they use. In case of a one-minute pulse rate, consumers end up paying for the whole minute, even if they use only a couple of seconds.             
 

Date: 9/9/2004          
BSNL registered record monthly additions          
BSNL registered a record monthly additions of 6,27,713 subscribers. This is the highest ever monthly additions by any company since the inception of Cellular Telephony in India. Total all India GSM subscriber figure stood at 3,20,19,351. Around 14 Lakh GSM Subscribers were added in August. According to Mr. T. V. Ramachandran, Director General of COAI, "At this level, GSM continues to hold 79% of the total mobile market and the GSM additions in August'04 represent 85% of all new additions, the trend very clearly is in line with international trends, where GSM continues to be the predominant choice of customers globally".          
 
Date: 9/9/2004            
MTNL slashes pre-paid rates            
MTNL announced a reduction in mobile tariffs to 80 paise per minute for prepaid services and to 90 paise per minute for postpaid subscribers. The new tariffs would be available from October 2. MTNL's tariff of 80 paise per minute is restricted to the intra-MTNL network, while for MTNL-to-other networks, call charges are Rs.1.20 per minute. MTNL would still be the cheapest service in Delhi & Mumbai since it offers 100% talk-time to subscribers. Other companies offer about 60% of the value as talk-time. The company recorded a growth of 11% in revenues to Rs.6,600 crore and is expanding its GSM network aggressively. Currently, it has a network of 2,25,000 lines each in Delhi and Mumbai.             
 
Date: 9/9/2004            
Reliance Infocomm to raise $1bn foreign debt             
Reliance Infocomm plans to raise $1bn via foreign loans to fund its expansion. The company is also considering an initial public offering of about Rs.4,000 crore after March '05, on completion of its second full year of commercial operations. The company has decided that it does not need to offer a stake to private equity investors whose expectation of returns are high while foreign loans come at much cheaper rates. Reliance Infocomm, which has rapidly developed a subscriber base of over 8m, is raising about $1.1bn in three tranches. The company will borrow about $500m from the US Exim Bank, $250-$300m from foreign commercial banks and another $250-300m from export agencies.  Apart from the foreign loans, Reliance Infocomm has also raised Rs. 5,000 crore from domestic banks and financial institutions. The funds will be used to expand its coverage to about 5,000 cities and towns across the country. It also plans to expand its broadband coverage and roll out its set top box models by March '05.             
 
Date: 8/9/2004             
Samsung launches slimmest CDMA phone             
Samsung launched the slimmest CDMA phone in the country called Slim Ultra. It will be sold through Reliance Infocomm and will be priced at Rs.2,999 for Reliance subscribers in both pre-paid and post-paid categories. This model has been customised for Indian users. It has a phone book memory of 2000 entries, 16 polyphonic ring tones, Hindi SMS and it works on CDMA 800 mhz frequency.              
 
Date: 7/9/2004             
COAI disagrees with TRAI on spectrum issue             
The GSM cellular operators association COAI walked out of TRAI's open house discussions on new spectrum policy. Later, representatives from COAI and equipment manufacturers like Alcatel, Nokia and Siemens as well as from GSM and Global Suppliers associations met TRAI officials to dissuade them from any plans to allocate US PCS 1900 band (1850-1910 Mhz paired with 1930-1990 Mhz) to CDMA operators like Reliance and Tata Teleservices.  According to them  the move would harm India's GSM progress towards 3G services and would be in conflict with current policy. GSM operators say the 1900 Mhz band should be used for IMT 2000 or 3G services that promise high speed data on mobiles, where both CDMA and GSM services can co-exist. They allege that CDMA operators however want it as US PCS band, for current network expansion. COAI says allocating the band to CDMA operators would lead to interference in their services and harm GSM transition to 3G. CDMA operators say their equipment and handsets are not easily available in any band other than US PCS 1900 Mhz band.              
 
Date: 6/9/2004             
STT & Telekom Malaysia's stake in IDEA             
In an agreement to be finalized soon, Singapore Technologies Telemedia (STT) and Telekom Malaysia International are not only acquiring AT&T's 33% stake in Idea Cellular, but are also increasing their stake to 49% through the preference share route. This will lead to a dilution of stakes of the Tatas and Birlas in Idea Cellular. Currently, the two hold 33% each in the company. Apart from AT&T, the other foreign partner in Idea is AIG, which holds about 2%. Idea Cellular has an equity of about Rs 2,500 crore. The preference share issue will also result in infusion of fresh funds into the company. The combine is expected to invest an additional $200m in Idea Cellular, besides the $200m used to buy out AT&T's stake. The funds are likely to be used to meet the capex requirements, as also to fund acquisitions. It could also be used to retire a part of the debt of Rs. 4,000 crore. Both the acquisition of AT&T's stake by STT-Telekom Malaysia and the equity infusion of $200m are subject to government approval. Once stakeholders reach a final agreement, Idea is expected to approach the foreign investment promotion board for its approval.              
 
Date: 6/9/2004             
Bharti revamps management             
Bharti is revamping its top management. Chairman and Managing Director Sunil Mittal  is optimising his span of control and delegating portfolios to the two joint MDs - Rajan Bharti Mittal and Akhil Gupta. Rajan Mittal will head marketing, business development, corporate affairs and corporate communications and Akhil Gupta will oversee finance, IT, secretarial, regulatory, technology and projects. The new structure will also include the chairman's office headed by Anil Nayar, corporate director, chairman's office, who will assist the CMD in the transformation.              

The direct reportees to the CMD will include the two joint MDs, both presidents of Infotel and mobility divisions, director of human resources and the corporate director (HR) and the General Counsel. The company plans to drive initiatives across four key parameters - customer delight, institutionalising Bharti, pursuing revenue enhancement and striking work life balance. A seven-member management council has been formed to provide strategic direction to the company. A new business division, Enterprise business, has been created to provide a one-window interface to all corporate customers. Bharti has also initiated business processes to match global standards using six sigma methodology.             
 

Date: 6/9/2004              
BSNL introduces new pre-paid recharge coupons              
Bharat Sanchar Nigam Limited is introducing new pre-paid recharge coupons (Excel) of Rs.3000 valid for 365 days starting October 1st, 2004.              
 
Date: 6/9/2004              
HTIL will directly hold 42%              
Hutchison Telecommunications International Ltd. (HTIL), the telecom holding company of Hong Kong's Hutchison Whampoa Group, will directly hold 42% in its consolidated cellular entity in India, Hutchison-Essar. HTIL will also hold an additional 14% in Hutch-Essar, which will be "a non-controlled and indirect stake, post-consolidation". The final post-consolidation ownership structure of Hutch-Essar is awaiting clearance. HTIL, which will be listed on the Hong Kong and US exchanges, has its biggest investments in Hong Kong, India, Israel and Thailand. HTIL's India shareholdings include direct and indirect interests in six Indian operating companies (Hutchison Max Telecom, Hutchison Telecom East, Hutch-Essar Telecom, Fascel, Aircel Digilink India and Hutchison Essar South) and in Hutch-Kotak Mahindra JVs.               
 
Date: 3/9/2004              
DoT OKs Hutchison's merger plan              
DoT OKs Hutch's plans to merge its four associate cellular companies with itself and has now clarified that the FDI ceiling of 49% is not being violated. The merged company will have a foreign shareholding of 48.52% and the equity is likely to be from 72-74% in the holding company, only if the proportionate foreign equity of the Indian companies holding shares in these are reflected in the composition of Hutchison Max. FIPB has now forwarded the proposal to the finance ministry. The four associate cellular ventures are Hutchison Essar Telecom, Hutchison Telecom East, Fascel and Hutchison Essar South. Indian companies with foreign equity stake can also hold shares of the merged company. These include Essar Teleholdings, Usha Martin, Telecom Investments, Indusind Telecom, Jaykay Finholding and Max Televentures.  In a draft Cabinet note, the DoT has proposed a ceiling of 74% for both direct and indirect foreign equity holding. Hutch plans to acquire the combined 48.96% stake of Mobilvest (Mauritius), CCII (Mauritius), Prime Metals and Euro Pacific Securities in Hutchison Essar Telecom through the swap route. As per the swap ratio agreed between them, the four overseas companies will together get 14.43% stake in the four-way merged entity. Similarly, Hutch will acquire the 32.58% stake of Asia Telecommunications Investments (Mauritius) in Hutchison Telecom East for swapping 5.61% of equity in the merged equity, 49% holding of Trans Crystal in Fascel in return for a 8.36% stake in the merged entity and the 49% stake of Al-Amin Investments in Hutchison Essar for a swap equity of 4.65% in the new merged entity.              
 
Date: 3/9/2004              
Reliance move on tariff war              
Reliance introduced 40 paise per minute tariff within its network for plans with higher rentals. The company has also announced a new flat rate of Re 1 per minute for any call to any phone anywhere in the country for a plan that requires a monthly commitment of Rs. 549. For the entry-level plan called 'New Joy 149,' most rates are the same as those offered by other operators, except for local and intra-circle calls to any mobile or fixed phone that cost Rs 1.79, cheaper than the Rs 1.99 - 2 rate offered by leading operators.               

There is no flat rate for STD calls, instead there is a rate of Rs.1.99 for calls to GSM mobiles over distances of 51-200 kms and a rate of Rs. 2.99 for calls to GSM and fixed-line phones for distances over 200 kms. Reliance rentals are cheaper as caller ID charges are only Rs.25 as compared to Rs.75 charged by other GSM operators. Also, Reliance offers the home tariff without any surcharges, while roaming anywhere within the country.              

Reliance is also offering a rate of Rs.12.99 per minute for calls to the US, Canada, Europe, UK and South-East Asia for customers under the plans 'Joy 399' and 'Joy 499.'              
 

Date: 2/9/2004               
BPL Mobile launches per second billing               
BPL Mobile introduced one-second billing for both pre-paid and post-paid subscribers across all its markets, levying one paisa per second for local calls to all GSM mobiles. The new tariffs will enable subscribers to pay only for the actual time usage and not more.               

Post-paid users would have to pay a standard call rate of two paisa per second for local outgoing calls to all phones (GSM, CDMA and landlines), while there is also an option of making local calls at a special rate of one paisa per second to all GSM mobiles. The monthly tariffs would continue to be at around Rs.175. The facility can be availed by calling the company's helpline numbers.               

For pre-paid (MOTS), subscribers can get a standard call rate of three paisa per second for local outgoing calls to all phones, while a special rate of one paisa per second for outgoing calls to all phones is also being provided. The facility is available to all existing MOTS subscribers, effective Wednesday and the special rate on both post-paid and pre-paid can be availed by subscribing to Mobile Ratesaver Rs.25 per month subscription.                
 

Date: 1/9/2004               
Elcoteq to set up manufacturing facility in India               
One of the largest electronic manufacturing services company, Elcoteq is planning  to set up manufacturing facility in India. Finland based Euro 2.23 bn Elcoteq is working out plan to manufacture not only handsets for companies like Nokia and Ericsson but also network equipment for telecom companies. Elcoteq's manufacturing facility will be based in Bangalore and it will employ around 1,000 people. According to Henry Gilchrist, director, Elcoteq Asia, Elcoteq will be the first global EMS company to offer a fully integrated range of services for telecom infrastructure and handsets OEMs in India.               
 
Date: 1/9/2004               
Airtel slashes post-paid rates               
Airtel postpaid subscribers can now make local calls to a GSM mobile at Re.1 per minute by paying Rs.25 every month. By paying Rs.75 per month, STD calls to any phone can be made at Rs. 2 per minute. The new post-paid plans will be applicable to new as well as existing subscribers and will be rolled out between August 30 and September 1. Existing subscribers are likely to get individual communication in a couple of days and the new tariffs will be effective from the second week of September after modifications in the billing system.               
 
Date: 30/8/2004                
Airtel is launching its cellular services in six new circles                
Airtel has started launching its cellular services in six new circles namely UP (East), Bihar, Orissa, West Bengal, J&K and North-East. Airtel has over 8 million subscribers spread over 17 circles. It is planning to set up capacities of about a million lines in these six areas at an initial cost of around Rs.650 crore. Airtel's move to 'C' category circles is viewed as timely because much of new cellular telephony growth is expected to come from smaller towns and cities.  Airtel is expected to cover 500 towns and cities in new areas.                 
 
Date: 28/8/2004                
C Sivasankaran to invest $500 m in mobile-cum-broadband rollout                
The NRI tycoon C Sivasankaran who made Rs.1200 crore in Aircel-Hutch deal is planning to invest $500 million in a mobile-cum-broadband rollout across eight circles through wireless arm, Dishnet Wireless Ltd. Dishnet Wireless has recently acquired unified access service licences of West Bengal, Orissa, Bihar, Madhya Pradesh, Uttar Pradesh (East), Himachal Pradesh, North-East and Jammu & Kashmir at a price of just Rs.45 crore. The company has also applied for Uttar Pradesh (West) licence with DoT. The Sterling group is planning to roll out cellular as well as broadband services in all these circles over the next three years.                
 
Date: 27/8/2004                 
Hutch lowers tariff                 
Hutch has introduced a flat rate tariff structure for its pre-paid subscribers where a local call to any mobile phone would cost 99 paisa per minute and STD  call to any phone in the country would cost Rs.2.25 per minute. Users opting for this new tariff would be charged Rs.25 for each subscription. The new tariff could be activated by sending an SMS 'Act 99' or 'Act STD' TO 123. Hutch subscribers who do not opt for this new tariff will be paying Rs.1.99 per minute for local calls.                 
 
Date: 25/8/2004                 
Following Reliance, IDEA and AirTel also cut tariffs                 
As expected, following Reliance's tariff cut by 60% GSM majors are reducing their tariffs too. IDEA announced a new tariff plan for its pre-paid on Monday introducing cell-to-cell rate of 99p and SMS rate of 49p by just paying Re.1 per day. Idea Chitchat Starter Pack is available at Rs.199 and one can make calls for as low as Rs.1.49. An STD call would cost Rs.2.99 across board. Idea has also introduced a tariff of Rs.1.99 for calls ranging less than 2 min for subscribers with usage less than Rs.300 and Rs.1.75/min for subscribers with usage above Rs.300.                 

Airtel unveiled its new tariff plans on Tuesday. AirTel-to-AirTel  STD tariff has been reduced to Rs.2 per min and calls to other operators would be charged at Rs.3.25 irrespective of the distance. Tariff on local calls from AirTel pre-paid to any other AirTel mobile will be Re.1/min while calls to other service providers will be at the rate of Rs.2.25/min. New AirTel tariffs will be applicable to both new and existing subscribers on payment of Rs.50 as one-tome entry fee. Hutch is also expected to follow the suit soon.                 
 

Date: 14/8/2004                  
Reliance cuts tariff by 60%                   
Reliance Infocomm has cut tariffs for its pre-paid mobile services. It has also promised to reduce its post-paid tariffs shortly. The move could result in a tariff war as other players are likely to be forced to match or better the new Reliance tariffs. Reliance has announced differential tariffs for calls to its own subscribers and to customers of its competitors.                    

For local calls, the company has cut its pre-paid tariffs by 60% for calls within its own network (to other Reliance subscribers, both mobile or FWT/FWP) and by 30% for calls to other GSM/CDMA/landline users. A local or intra-circle Reliance-Reliance call will cost 99 paise per minute, while calls to other mobiles and landlines will cost Rs.1.79 per minute compared to the Rs.2.49 per minute to mobiles and Rs.2.99 per minute to landlines, charged earlier.                   

The cost of a local call from other GSM mobile phones cost Rs.2.75 per minute for pre-paid users. For inter-circle or STD calls, a Reliance-Reliance call will cost Rs 1.79 per minute compared to Rs.2.99 per minute earlier. Calls to other mobile and landline networks will cost Rs.2.49 per minute compared to Rs.2.99 per minute (for calls to mobiles) and Rs 3.99 per minute (for calls to landlines). The new tariffs will be effective from August 16.                  

Reliance has done away with distance slabs to make it easily understandable for subscribers. The new tariffs will be available to existing subscribers too when they recharge with a new pre-paid voucher. The fixed costs per voucher (called rental or administration fees) is Rs.150 for vouchers of all values - Rs.324, Rs.500, Rs.1000.                   
 

Date: 13/8/2004                  
GSM operators' sales rise by  8%                   
GSM operators posted an 8% increase in revenues during the first quarter of this fiscal even as average revenues per user (ARPUs) for the industry declined by 6.8%. Revenues in the first quarter jumped to Rs.2,626 crore from Rs.2,422 crore in the previous quarter ended March '04. Industry ARPUs fell to Rs.402 in this quarter from Rs.431 in the corresponding period last year.                   

In terms of total revenues, the Bharti group continues to be number one with a 9.5% increase in revenues to Rs.909 crore from Rs.830 crore in 16 circles, while Hutch comes a close second with a 16.2% growth to Rs.804 crore from Rs.692 crore in 10 circles.                   
Bharti's revenues include numbers from the Hexacom circles, while Hutch's revenues do not include Aircel numbers. Idea Cellular has reported total revenues of Rs.430 crore, a 2.7% increase over Rs.419 crore in the previous quarter.                   

Mumbai (Hutch) has beaten Delhi (Bharti) to become the circle with the highest ARPU as well as the one that clocks the highest revenue. Hutch Mumbai has grossed Rs.233 crore during April-June '04, showing a 20% increase over the Rs.194-crore reported during January-March '04. In terms of ARPUs, Hutch's Mumbai circle has reported an ARPU of Rs.671 during April-June '04, an increase of 10.3% over the ARPU of Rs.608 in the previous quarter.                   
 

Date: 13/8/2004                  
Roaming tariffs up                   
GSM cellular operators have raised roaming airtime tariffs by an average of about Rs.2 per minute or more. The new tariffs have been effective from August 10. The operators had increased monthly rentals for international roaming on August 4.                   
International long distance tariffs have jumped to Rs.19 per minute from Rs.17 per minute on calls to USA and to Rs.22 plus from Rs.19 for calls to the Gulf countries.  For incoming and outgoing calls to mobile phones while roaming, the flat rate of Rs.3 per minute has been upped to Rs. 4.90 per minute for calls (up to 200 km in terms of distance), Rs.5.45 per minute (between 200-500 km) and Rs.5.65 per minute (above 500 km). For outgoing calls to land lines, the cost will be Rs.5.90 per minute (up to 200 km).                  
Rs.5.64 per minute (200-500 km) and Rs.5.84 per minute (above 500 km). Local calls while roaming will cost Rs.3.75 for calls to mobiles and Rs.4.25 for calls to land lines.                   
 
Date: 13/8/2004                  
Telecom FDI                   
A draft Cabinet note prepared by DoT on the basis of suggestions of security agencies has effectively disposed of the FM's move to up FDI limit in telecom services from 49% to 74%. The note does not directly oppose hiking the FDI limit. But a riding caveat could kill the interest of potential foreign investors. The Cabinet note says that wherever FDI is hiked to more than 49%, the licencee must start divesting the foreign equity within seven years of such a hike. This proposal may drive away foreign telecom operators who may want to run an Indian operation. Or more accurately, the DoT note limits the additional foreign investment to venture capitalists.                  

DoT has also suggested “Golden Share” - this would make it mandatory for telcos raising foreign equity to over 49%, to allot the government a golden share. The approval of “Golden shareholder” would be mandatory to amend Articles of Association and to ensure that management control rests with the Indian promoters.                   

The FDI would include investments by FIIs, NRIs, OCBs, FCCB, ADRs, GDRs, and convertible preference shares. The draft note has been circulated to all the concerned ministries including those of finance, defence, home affairs, and the departments of company affairs and legal affairs for approval.                  

The draft Cabinet note stipulates that it would be necessary for all telcos to get security clearance for raising FDI to over 49%. The companies would also have to incorporate in their Articles of Association that a minimum of 26% of the paid-up capital of the licencee company would be held by resident Indians or registered Indian companies.                  
                  
The Artricles of Associations would clearly stipulate that more than 50% functional directors on board including the chairman, the MD and the CEO shall be nominated by Indian promoters. The licencee company shall provide total access of its network to security agencies.                  
 

Date: 11/8/2004                    
IDEA to invest Rs.250 cr in new circles                    
IDEA mobile communications to invest Rs.250 crore in the three new circles that it has acquired from Escotel namely, Kerala, western UP and Haryana. The company has registered a growth of 1.35 lakh in July in these three circles. The brand migration in these circles has been smooth as the company had similar experience with RPG Cellular in Madhya Pradesh and Tata Cellular in Andhra Pradesh. IDEA's new investment plans will cover 250 new towns in these circles. The company had already enhanced capacity to cater to the new subscriber base. IDEA Cellular, the parent company, has at present a subscriber base of 4.2 million nationwide.                    
 
Date: 10/8/2004                  
Convergence of services                   
Unified licensing regime recommends all services like telephony, internet, broadband, cable TV, DTH, TV and radio broadcasting will be made available from a single service provider. The new regime will allow telecom service operators to include in their services broadcasting, either through wire or wireless medium.  In a supplementary note to its draft recommendations on unified licensing, TRAI has not only said that standalone broadcasting service licence could still be issued, but also clarified that the prevailing procedure of the I&B ministry issuing such licences (including allocation of spectrum in consultation with WPC) will continue.                     

I&B ministry continue to issue standalone broadcasting service licences, it will also clear broadcasting licence applications from a unified licensee. If a unified licensee wants to offer broadcasting service using wireless spectrum, he will have to apply to the I&B ministry. “The content, in any case, would be regulated by I&B ministry,” the TRAI note added, putting an end to the speculation over content and carriage regulation being taken over by a super regulator under a convergence regime.                     
 

Date: 10/8/2004                    
Telecom company outpacing growth of IT majors                   
Bharti displayed fastest growth in revenues as well as profits in the infocomm world, and saw highest revenues last quarter. While Bharti's revenues grew at 65 % to cross Rs.1700 crore, Wipro followed with Rs.1590 crore and a growth of 49% and Infosys grew at 34% with a revenue of Rs.1489 crore. Telecom major Bharti has seen its subscriber base doubled to 83.7 lakh.  Last year too it had doubled its subscriber base and had joined the billionaire's club of revenue with a little over Rs.5000 crore.  Bharti has about a quarter of the GSM mobile market, but its average revenue per user, just like that of the rest of the industry, has been steadily falling. Analysts expect average revenue per user (ARPU) to decline about 12 to 13% per year even as mobile access revenue is expected to grow at compounded annual growth of 40% to 50%.                     
 
Date: 7/8/2004                     
80% cut in unified licence fee suggested by TRAI                     
TRAI has issued draft recommendations on the Unified Telecom Licence regime. The suggestions include reducing the entry licence fee by over 80%, cutting the annual revenue share for the government to 6%, and allowing unified licence holders to offer broadcast services. If the government accepts these recommendations, new operators will be able to offer nationwide services by paying an entry fee which is less than 10% of what existing operators like Reliance, Bharti and the Tatas have shelled out.                      

TRAI has suggested three categories of licences - unified licence, class licence and licensing through authorisation. The licences will be technology neutral. A unified licence will allow operators to offer the entire gamut of telecom services - national and international long-distance services, as well as fixed and mobile access services. It will also permit operators to offer broadcast services. A 'class licence' will permit operators to offer all services which have one way connectivity, like Vsat services. This licence includes niche operators, who will be allowed to offer fixed telecom services in districts where fixed rural tele-density is less than 1%. 'Licensing through authorisation' will permit operators to offer infrastructure and bandwidth services to service providers.                      

The existing telecom operators have opposed Trai's recommendations. The new suggestions don't permit inter-connectivity of different circles. Basic telecom operators were permitted full mobility on the pretext of advancement of technology. Technology also permits inter-connectivity of networks in different circles.                      
 

Date: 6/8/2004                     
Providing connectivity in rural areas may not be mandatory                     
TRAI is considering to recommend removal of mandatory roll-out obligations for national long distance (NLD) service providers in the new unified licence policy. Currently, the NLD service providers are required to provide connectivity in non-profitable rural areas which increases the project cost drastically. If roll-out obligations are removed, Reliance Infocomm, Bharti, and Tata would benefit. Government owned BSNL is the only other NLD operator which already has a nation-wide presence.                     
 
Date: 5/8/2004                      
Mobile to mobile calls no longer cheaper                      
Mobile operators have announced a flat rate for calls made to either a mobile phone or a fixed phone. The monthly rentals are also raised. Cellular operators, BPL and Orange, in Mumbai announced a flat rate of Rs. 2.25 per minute (post-paid) and Rs. 2.75 per minute (pre-paid) for its entry level plans. Airtel has not made any changes to its tariff plans so far.  As a result mobile-to-mobile calls have become more expensive while mobile to fixed calls have become cheaper. An increase in monthly rentals from Rs.149 to Rs.175 in the case of post-paid customers is a bad news. In the case of pre-paid customers, the talk time value is likely to be reduced. The new rates are effective August 4.                       
 
Date: 3/8/2004                       
Bharti to discontinue Touchtel brand, only Airtel will be used                       
Airtel will be the single brand for Bharti's mobile and landline telecom business. Touchtel brand will be discontinued by month end.                       
This follows the company's acquisition of unified licence and subsequent surrender of its separate licence for landline telecommunication services. Airtel, the brand for Bharti's mobile services so far, has over 7.6m subscribers, both post-paid and pre-paid, across 16 circles in the country while Touchtel, which offers landline services in about five circles, has a subscriber base of around 7 lakh. The company in the long term will work out modalities to bring both the mobile and landline operations under a single corporate entity too.                        

Bharti Tele-Ventures became the first private fixed-line service provider in India, promoted under the Touchtel brand, by launching its service in Madhya Pradesh, where it has 2.5 lakh subscribers. With the government opening up the segment for more players and circles, it extended its landline services to Delhi, Haryana, Karnataka and Tamil Nadu circles.                        
 

Date: 29/7/2004                       
Hutchison-Essar re-shuffles top management                      
Top management re-shuffle is underway at Hutchison-Essar in the wake of the recent acquisition of the erstwhile C. Sivasankaran owned Aircel Ltd. in Tamil Nadu and Chennai. Sunil Sood, who heads Hutchison's Kolkata cellular operations, Hutchison Telecom East, will take over as CEO of Hutchison's Chennai and Tamil Nadu circles from August 1. Kumar Ramanathan will assume the reins as COO of Hutchison's Kolkata and West Bengal circles next month. At present, Mr. Ramanathan is COO of Hutchison's Andhra Pradesh operation. Both Mr. Sood and Mr. Ramanathan will report to Hutchison-Essar executive director, Sandip Das.                        
Mr. Sood in his new capacity will handle the upcoming integration of the twin-circle Aircel operation (Tamil Nadu and Chennai) with Hutchison's existing Chennai licence. The combined three-circle subscriber base of Hutchison-Chennai and the recently-acquired Aircel licences stood at 1.37m on June 30. Mr. Ramanathan will look after Hutchison's cellular launch in West Bengal, which is scheduled for September end. Mr. Shiv Shankar, vice president (operations), who was in charge of Hutchison-Chennai, will now head Hutchison's Haryana circle. Mr. S. Mann from Dell Computers will be vice president (sales and marketing) of Hutchison-Chennai.                        
 
Date: 26/7/2004                      
STT-Tele to retain 33% IDEA stake post-IPO                      
Singapore Technologies-Telekom Malaysia combine, which recently took a 33% stake in India's fourth largest GSM operator, may invest directly in IDEA's equity so that its stake does not fall below 33% in case of an IPO by the company. The companies, which were successful in their bid for At&T-Cingular's 33% stake in IDEA in June, may invest about $100-200m more into IDEA at the time of the IPO, which is now tentatively slated for later this year. STT-Telekom Malaysia is close to completing the deal to acquire AT&T-Cingular's 33% stake. IDEA's other stakeholders are Tatas and AV Birla group. They both hold 33% and are believed to be interested in exiting the company at the right time and price.                        
 
Date: 26/7/2004                        
DoT opposes import of second-hand equipment for telecom                      
DoT has opposed import of second-hand equipment, even though the Exim policy allows import of used capital goods, if they are not more than 10 years old. Since technological obsolescence is rapid in the case of telecom, the department feels that permitting import of used capital goods would affect quality of services. The views of the department were expressed recently, when the Foreign Investment Promotion Board (FIPB) took up a proposal from Cisco Germany GmbH for sale of used and refurbished Cisco hardware in India. The Germany-based company had sought permission for setting up a 100% subsidiary in India to import, refurbish, assemble, market and service routers and other hardware.                        
 
Date: 26/7/2004                       
Telcos plan to raise $3bn debt                       
Telecom companies in India are on a debt-raising spree. GSM operators Hutch, Idea and BPL, and CDMA operator Reliance Infocomm are either raising fresh debt or refinancing old debt. The total quantum of debt raised may come to $3bn.                        
According to sources, Hutch plans to raise debt worth $1bn and Idea is looking to refinance $850m of debt, while Reliance is raising about Rs. 5,000 crore. BPL also has plans to refinance some of its old debt.                       
 
Date: 24/7/2004                       
Bharti announced ten-fold jump in profits                      
Bharti has announced an almost ten-fold jump in profits to Rs.296 crore in the quarter ending June '04, over the same period last year. While its subscriber base doubled to 83.7 lakh, revenues jumped 65% to Rs.1,705 crore. The company is also seeking shareholder approval for a sponsored ADR secondary offering of up to 200 m equity shares. The largest listed telecom company had joined the billionaire's club of revenue, with a little over Rs. 5,000 crore in the last financial year. It also made a net profit of over Rs. 600 crore in '03-04.                       
 
Date: 20/7/2004                        
Serious security issue                         
Mobile operators in Pakistan have installed cellular networks whose coverage area extends well beyond the borders into the terrorists ridden lands of J&K. Local subscribers end up getting hooked on to the Pakistani networks while using their local mobile handsets. As a result sometimes Indian subscribers end up paying charges for international roaming even for a local call which are around Rs. 80 per minute. It  was noticed by Airtel, the only private cellular mobile network that is setting up mobile network in Jammu and Kashmir  during testing. Airtel has lodged a complaint with DoT and urged to take up the issue with the relevant authorities in Pakistan. Currently, BSNL(Bharat Sanchar Nigam Ltd.) is the only operator that is offering services in Jammu and Kashmir with a subscriber base of 46,000. Airtel was the first private GSM service provider to acquire licence. It has not yet launched its services. Some technical solutions are immediately required else it may facilitate terrorist activity.                          
 
Date: 17/7/2004                        
Hutch-Essar to raise Rs.1200 cr                         
The Hutchison-Essar is in talks with foreign bankers to fund the acquisition of Aircel. It is negotiating with ABN Amro, HSBC and Standard Chartered for raising around Rs.1200 crore. The loan has a one-year tenure. According to sources the debt could be raised either through a loan syndication by the three banks or through a bond issuance. Hutch has decided to use the debt route to raise funds for the Aircel acquisition to strike a balance between debt and equity as it is said to have little debt on its books so far.                         
 
Date: 16/7/2004                        
FDI cap decision may rollback                        
UPA government is under pressure from the left and is considering a modification to its proposed FDI hike. The FDI proposals for telecom and aviation need cabinet approval while the proposal for insurance sector need parliamentary approval.                        
 
Date: 10/7/2004                          
$4 billion additional foreign capital inflow expected                          
An additional foreign capital inflow of upto $4 billion is expected in the Indian telecom sector within this year. Part of it will come in as direct investment by way of acquisitions by foreign operators like STT (Singapore Technologies Telemedia) and Hutch. Bharti Tele-Ventures is planning to offload upto 10% of its equity in an ADR issue worth $700 million shortly. Today, Indian mobile market enjoys one of the highest growth rates globally. Analysts believe that the GSM market would witness more consolidation through mergers and acquisitions. Among the CDMA players Tatas may tie up with NTT DoCoMo to take an equity stake. Other global players who might take interest in the Indian telecom opportunity are Vodaphone, Telecom Malaysia etc.                          
 
Date: 9/7/2004                          
FDI in telecom hiked                          
Finance Minister P. Chidambaram announced a steep increase in foreign direct investment in insurance, telecom and civil aviation sector. FDI in telecom has been hiked from 49% to 74%. Following the news the shares of Bharati, VSNL and BSNL gained significantly on BSE. Hutchison, IDEA, Bharti, BPL and Spice will gain by the government's decision. An estimated investment of around Rs.50,000 crore is required in the sector in the next three years to keep pace with the growing demand. Since such funds are not available in the domestic market, telecom operators had demanded the FDI limit be raised beyond 49%. Moreover, raising money from the domestic market is more expensive than internationally. Attracting foreign investment will help boost growth and increase telecom penetration in the country. Bharti will be the main beneficiary. The 49% FDI limit had restricted FIIs from buying Bharti shares in the secondary market. Under the 74% FDI regime, besides being able to trade in Bharti shares, FIIs will bring in the funds when Bharti wants to raise them through the equity route. Earlier, the DoT had been opposed to raising FDI limits to 74%, saying that it would give management control to foreigners.                          
 
Date: 8/7/2004                          
13 lakh mobile subscribers are being added per month                          
Mobile operators added 13.7 lakh subscribers in June, after reporting similar growth for the previous two months. While GSM operators added 10.3 lakh mobile subscribers, CDMA operators added 3.4 lakh subscribers last month. The total GSM subscriber base in the country now stands at 2.9 crore, while mobile base of CDMA operators was at 80.7 lakh last month.                           

Bharti continues to be the largest GSM operator with 76.3 lakh mobile subscribers thus commanding a 26.3% GSM subscriber base, followed by BSNL with 19.8% subscribers and Hutch is close behind at 19.7%. In the fourth position is Idea with 13.9% market followed by BPL at 7.4%. Reliance's mobile base (CDMA) stood at 72.9 lakh subscribers.                          
 

Date: 3/7/2004                          
GSM commands 72% of the world's wireless market                          
Worldwide GSM subscribers in March 2004 was 1046 billion while CDMA subscribers during this period was 199 million. GSM accounts for 72% of the world's wireless market. In India also both the technologies are competing with each other. GSM is still the prefered one. Both GSM and CDMA service providers are of the view that a combination of cost and value added services is the key  to retain subscribers and bring in new ones.                          
 
Date: 3/7/2004                          
Mobile phone subscription in India may exceed fixed line by year end                          
According to a Government release mobile phone subscription in India may exceed fixed line connections by the end of 2004 with cellular and WLL combined comprising over 45% of the total subscribers. Releasing the latest figures of performance of telecom sector during the first two months of the current fiscal, government said 28.74 lakh new fixed line connections were added compared to 25.95 lakh in the same period last year, registering a growth of 39%. The number of mobile phones, including WLL (M), as in May 2004 stood at over 363 lakh and their share in the total number of 794.14 lakh phones was over 45%. The private sector has contributed more than 90% of the additional phones provided in April-May 2004. Its share in the total number of phones has increased to 41%. The number of village public telephony (VPTs) as on March 31, 2004 stood at 5,22,515, while the number of rural direct exchange lines was at 123.33 lakh. Tele-density during the period increased to 7.29% from 7.02% as on March 31, 2004.                           
 
 
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