New Telecom policy approved: Roaming charges to go, one-nation-one-number cleared

NEW DELHI: The government today cleared National Telecom Policy 2012 that aims to abolish roaming charges thus allowing mobile phone subscribers to use same number across country without having to pay extra charges.

"Target is one nation full mobile number portability and work towards one nation free roaming," Telecom Minister Kapil Sibal told reporters after the Cabinet gave approval to NTP. The Department of Telecom (DoT) will now start process to implement full mobile number portability allowing users to retain their existing number at the time of changing their service providers across any state in the country.

However, consumers will have to wait for some time before roaming charges are abolished and one-number-one-nation concept implement as DoT will first work out modalities of the new scheme before it is brought into force. The NTP 2012 envisages increasing penetration of telecom services in rural area from current level of around 39 to 70 per cent by 2017 and 100 per cent by the year 2020.

Under the new policy broadband speed has been increased to minimum of 2 megabit per second (mbps). This change will come into force with immediate effect. With the new policy getting approved, telecom licences have been delinked from spectrum which was earlier bundled with the licences. The NTP 2012 will allow operators to provide services based on any technology by using airwaves and will not restrict them to use it for particular service using any specific frequency band. At present, there are frequencies which are specifically used for providing GSM or CDMA services as per the permit given to the companies.

NTP 2012 replaces 13-year-old New Telecom Policy 1999 and "seeks to provide a predictable and stable policy regime for a period of about 10 years," Sibal said. The cabinet has cleared the point that pertains to encouraging domestic manufacturing of telecom equipment.

"Making India a global hub for manufacturing. Till the time we will not set up industry here...India will not be able to become become global. It is very important because along with this prices of device will also come down," he said. The major details of the manufacturing telecom equipments are part of National Policy of Electronics which Sibal send is expected to be approved within a month.

"Electronics manufacturing policy is hopefully going to be decided this month.. it will go to cabinet soon," he said. The Cabinet has approved NTP 2012 with five changes related to revenue generation objective, Spectrum Act and TRAI Act. The government has deleted Spectrum Act which was proposed in the policy.

"Spectrum Act has been deleted as a policy matter we don't intend to have a spectrum act any more," Sibal said. In the point which aimed at giving more power to TRAI, Cabinet has added that policy making function would remain with government and the regulator will not make policy. "We just want to add that policy making function would, however, continue to remain with government, means TRAI will not make policy," Sibal said.

The cabinet also substituted the point which mentioned "direct revenue generation" as secondary objective of new policy with "availability of affordable and effective communication for the citizens is at the core of the vision and goal of NTP 2012" at two places. The government has also replaced a sentence related to spectrum allocation to migrate its users to different frequency bands to make way for services based on new technologies. Sibal said that any major changes in the policy in future will be brought to the cabinet for approval.

New telecom policy to make India roaming-free

"Affordability of the consumers is the core of our policy," Communications Minister Kapil Sibal said after a cabinet meeting chaired by Prime Minister Manmohan Singh approved the National Telecom Policy (NTP) 2012.

"Target is one nation full mobile number portability and work towards one nation free roaming."

Communications Minister Kapil Sibal / File pic

The minister said the new policy will replace the older regulation which has been in effect for more than 12 years now and provide a predictable and stable policy regime for a period of nearly 10 years.

The policy envisions providing a "secure, reliable, affordable and high quality converged telecommunication services anytime, anywhere for an accelerated inclusive socio-economic development".

The policy will be operationalised by bringing out detailed guidelines, as may be considered appropriate, from time to time.

It envisages increasing penetration of telecom services in rural area from current level of around 39 to 70 percent by 2017 and 100 per cent by the year 2020.

Broadband speed has also been increased to minimum of 2 megabit per second (mbps). This change will come into force with immediate effect.

Also, under the new policy, licences will be delinked from spectrum which has been bundled with the licences so far.

The NTP 2012 will also allow operators to provide services based on any technology by using airwaves and will not restrict them to use it for particular service using any specific frequency band.

At present, there are frequencies which are specifically used for providing GSM or CDMA services as per the permit given to the companies.

There are five changes in the policy compared to the draft policy that was released last year. These changes are related to revenue generation objective, Spectrum Act and TRAI Act.

The policy favours encouraging domestic manufacturing of telecom equipment.

"Till the time we will not set up industry here... India will not be able to become global. It is very important because along with this prices of device will also come down," Sibal said.

"Spectrum Act has been deleted as a policy matter we don't intend to have a spectrum act any more," he said.

On giving more power to TRAI, the cabinet decided that policy making function would remain with government and the regulator will not make policy.

The cabinet also substituted the point which mentioned "direct revenue generation" as secondary objective of new policy with "availability of affordable and effective communication for the citizens is at the core of the vision and goal of NTP 2012" at two places.

The government has also replaced a sentence related to spectrum allocation to migrate its users to different frequency bands to make way for services based on new technologies.

Sibal said that any major changes in the policy in future will be brought to the cabinet for approval.

The union cabinet also approved introduction of unified licence and authorised the Department of Telecommunications to finalise the new unified licensing regime with the approval of minister of communications and IT.

New telecom policy gets rid of roaming charges

NEW DELHI: Soon, you will not have to pay roaming charges for making calls on your cell phone while traveling within the country. Not just that, you will also be able to retain your number even if you move city.

The Union Cabinet set the stage for the drastic change in India's telecom story by approving a National Telecom Policy which also seeks to put an end to your frustration with slow speed of Internet surfing.

The policy was approved after telecom minister Kapil Sibal agreed to drop certain issues from his draft, which were seen to be controversial. To begin with, anxious to prevent a repeat of the situation where former telecom minister A Raja allegedly rigged spectrum prices to favour a select group of businessmen, the Cabinet decided to vest the power to price spectrum in a ministerial panel, rather than just the minister.

The Cabinet also felt that revenue generation could not be excluded as a goal, borrowing the politically safe formulation of "affordability" from the New Telecom Policy, 1999.

Deputy chairman of Planning Commission Montek Singh Ahluwalia had objected to the proposal to confer pricing power on the telecom minister of the day. The meeting saw him getting support from many of the attendees: home minister P Chidambaram, finance minister Pranab Mukherjee, rural development minister Jairam Ramesh, commerce minister Anand Sharma, heavy industries minister Praful Patel and highways minister C P Joshi.

The affordability argument can provide comfort to telecom operators who have launched a high decibel campaign against the regulator's prescription for a 10-fold increase in the reserve price for spectrum auction. However, government has virtually ruled out a rethink on the second suggestion of refarming of spectrum. The regulator has proposed that GSM operators switch from 900 Mhz band to 1800 Mhz at market determined rates, something that is being opposed to by the industry on the grounds that it will cost them nearly Rs 1.5 lakh crore.

On giving more powers to Trai: another issue which saw an animated debate in the Cabinet, the ministers were unanimous that policy making function would remain with government and not the sectoral regulator. "We just want to add that policy making function would, however, continue to remain with government, means Trai will not make policy," Sibal said.

This apart, there were at least two other modifications with the telecom department dropping proposals to enact a separate law for spectrum management and to set up a finance firm for the sector.

Another 2G fallout was the government's decision to separate telecom licences and spectrum, against the earlier practice of bundling them, and charge a market-derived price for the airwaves.

While the policy to turn India into one telecom circle for roaming purposes was cleared by the Cabinet, it will take a while before you stop paying for taking calls in another state as the telecom department is yet to work out the modalities. Once implemented, telecom companies may recover a part of the lost revenue by jacking up local call tariffs, analysts said.

"The target is one nation full mobile number portability and working towards one nation free roaming," Sibal said.

Trai's revised recommendations cosmetic in nature: Uninor

Terming Trai's revised recommendations for spectrum auction as "cosmetic changes", telecom firm Uninor today said the solutions for the problems will have to come from the political leadership.

"We note that the Trai makes some cosmetic changes and persists with a plan that evicts new operators. As earlier, we believe this is not the auction that the court ordered," Uninor said in a statement.

Last week, Norwegian Trade and Industry Minister Trond Giske, who is the representative of Norwegian government on the board of Telenor, had said that any failure of telecom major's USD 3 billion investment in India would have political implications.

Telenor holds 67.25 per cent stake in the Uninor while the balance is held by realty major Unitech.

"It has been obvious for some time that the solutions will have to come from the political leadership of the country. These must be such that billions in investments and committed foreign investors are not forced out of India," Uninor said.

Despite pressure from industry, Telecom Regulatory Authority of India (Trai) has stood by its recommendations of high base price for auction of spectrum, saying the increase in the tariff can be absorbed by operators.

Trai said "present recommended reserve price of Rs 3622.16 per MHz for 1800 MHz band works out to only 0.25 euro per MHz per population."

Saying the decision to increase spectrum usage charges was "bizarre", Uninor said Trai had missed an "opportunity to correct the flaws, place all cancelled spectrum into the auctions and invite operators to win back their licences."

"While that hasn't happened, we see the illogical rollout obligations stay... These are more steps in the wrong direction," Uninor added.

Tulip Telecom Q4 net income down 14% at Rs 66 cr

Tulip Telecom 's net income fell 14.3% to Rs 66 crore in the fourth quarter of FY12 from Rs 77.3 crore in the corresponding quarter of last fiscal, even after a tax write back of Rs 4.25 crore.

Revenues fell 3.6% to Rs 661.7 crore from Rs 686.6 crore year-on-year.

EBITDA too dropped to Rs 169.2 crore for January-March quarter of 2012 from Rs 199.1 crore in a year ago quarter.

EBITDA margin declined at 25.5% versus vs 29% during the same period.

Lower operational profit and higher interest cost impacted botomline of the company. Interest cost increased to Rs 53.7 crore from Rs 42.7 crore year-on-year.

Uncertainty aside, Vodafone says its Rs 25K-cr IPO on track

Uncertainty over its tussle with the taxman aside, Vodafone is keeping its foot on the gas when it comes to the Rs 25,000 crore rupee enterprise market. However, CNBC-TV18's Kritika Saxena reports that given the scarcity of spectrum and the exorbitant price set by TRAI, the going might be tough.

It started out as a consumer brand and quickly took a plunge into the enterprise space. Now, three-and-a-half years later, its enterprise business makes up nearly 10% of its total revenues and is expected to make up 15% of total revenues by 2015.

"We are slowly building our market. On the collaboration part, we are able to do audio conferencing. We have build a variety of portfolio for small and medium enterprises, national corporates and more important is our work with the government. But in our view, the market is anywhere upwards of Rs 25,000 crore rupees," Naveen Chopra, Director of Business Services at Vodafone told CNBC-TV18.

But there are headwinds aplenty. Vodafone says given stiff competition, growth will come only if the government make spectrum available, and keep prices reasonable.

'There is a lot of spectrum that needs to be made available in the future if we want businesses to succeed. So the point we have made to TRAI and the ministry is that India is that a successful business environment. Because you are dealing in the world in a very competitive environment so our country needs to be competitive. And a very big part of that these days is having the right communication," Marten Pieters, CEO, Vodafone India says.

Uncertainty aside, Vodafone is banking on strong growth continuing in India and says that while the jury is still out on a timeline, work towards an IPO is on track and the financial contours of an issue are being worked upon.

Meanwhile, to increase its enterprise presence, Vodafone wants to connect directly to consumers and is setting up customer experience centers across the country.

Bharti Airtel cuts 3G mobile data prices in India

Bharti Airtel , India's top mobile phone operator, on Thursday cut prices of its third-generation (3G) mobile data services by about 70% under some plans, a company statement showed, in a move to boost usage of the premium services in the country.

Bharti and its rivals in the country started 3G services last year after spending a total more than USD 12 billion to buy airwaves in an auction.

But take-off of the services, which allow faster Internet on phones and video calls, has been slower than expected, partly due to high prices.

Vodafone to Sibal: TRAI recos are legally flawed

In a letter to telecom minister Kapil Sibal, Vodafone has called the TRAI's recommendations on 2G auction and refarming legally flawed, reports CNBC-TV18's Malvika Jain.

Vodafone believes that as far as continuity of license is concerned, that is something that is inbuilt into the policy and license framework. The company has said that there has to be continuity when it comes to the type and quantum of spectrum.

Vodafone's licenses in 10 circles are up renewal in 2014 along with those of Airtel and Idea . A portion of 900 Mhz of spectrum that has been allocated to them may be refarmed as per the per the TRAIs recommendations.

The company has also trashed the refarming recommendations and said that it alone will have to invest approximately Rs 10,000 crore in case it is allocated spectrum in 1800 Mhz band instead of 900 Mhz band.

The Telecom Commission chairman R Chadrashekhar had mentioned that TRAIs recommendation have been sent back to the regulator for reconsideration. It remains to be seen what the final recommendations will look like.

Telenor to exit if TRAI's spectrum price proposal accepted

Norwegian firm Telenor will be forced to exit India if telecom regulator TRAI's proposals to auction airwaves at 13 times the price used in 2008 are accepted, Telenor Group Executive Vice President Sigve Brekke said today.

"If these recommendations become policy, then the Government of India will be forcing Telenor Group to exit. It will be almost impossible for us to participate in the upcoming auctions," Brekke said in a statement.

The Telecom Regulatory Authority of India (TRAI) last week recommended that the government should auction 5 MHz of airwaves in the 1800 MHz band and companies will have to pay a minimum Rs 3,622.18 crore for every unit of spectrum. This is about 13-fold increase over what they paid in 2008 when licences were given under the then telecom minister A Raja, when permits were bundled with 6.2 MHz of 2G spectrum for Rs 1,659 crore.

Telenor said it has invested over USD 3 billion since buying a majority stake in the telecom business of Indian real estate major Unitech - Unitech Wireless - in 2008 which was renamed as Uninor. It holds around 67% stake in Uninor whose all 22 telecom licences was cancelled by the Supreme Court on February 2 along with other 100 licences belonging to various telecom companies.

The apex court has asked the government to conduct fresh auction for the spectrum by August 31 and licences of the company will remain valid till September 7. Telenor had said it will participate in the fresh round of auctions, though with a new minority Indian partner (in compliance with Indian laws).

Brekke, who also heads the Group's Asia operations, added that the Government will not be following the Supreme Court order if the Trai proposals were accepted. "We believe that with these recommendations, the Government will not be following the court order.

We hope that the Government will look at issues such as only 5 Mhz in the auctions, participation not just for fresh license seekers but all operators and impractical rollout obligations, in addition to the reserve price, when it devises the auction rules," he added.

Telecom Commission, the highest decision-making body in the sector, is meeting today to decide on the recommendations put forward by Trai. The Indian JV of the company had over 38 million subscribers on its network by end of January 2012 as per Trai.

Tulip Telecom Launches On-Demand Cloud Storage Services

Tulip Telecom launched two new services to cash in on the emerging opportunities in the managed back-up and cloud computing space, and is targeting small and medium enterprises (SME), said a senior company official. The Mumbai-based company has partnered with the Bangalore-based EMC Data Storage Systems (India) to offer the services out of its new datacentre in Bangalore.

"Managed back-up services can reduce the total cost by nearly 40 percent and increase the data restoration success rate to around 99 percent from 60 percent. The loss of data during restoration means loss of business opportunity," said Deepinder Bedi, Executive Director at Tulip Telecom. He said globally the managed back-up services market is around $4 billion and the hosted (remote) back-up service is around $1.1 billion.

Tulip Telecom would provide end-to-end managed on-demand storage services and Backup-as-a-Service (Baas). The services would be offered using EMC's unified storage and backup and recovery technologies. "We will not be partnering with any other solutions provider for offering these two services," Bedi said. He said the Indian market for these two services is huge and the company will be targeting the SMEs.

Bedi said once the company exhausts the datacentre capacity in Bangalore it would branch out to other cities like Delhi.

On-demand storage and BaaS are cloud computing based business models wherein information storage, backup, archival and de-duplicationtechnologies are offered to customers on need basis and as`pay-as-you-use' manner.

"The global cloud computing market in 2016 is expected to touch $4.5billion," said Rajesh Janey, President, EMC India. 

Telecom panel seeks more clarity on 2G from TRAI

The Telecom Commission has asked TRAI to re-examine almost all its recommendations on the 2G auction. CNBC-TV18's Malvika Jain reports that some recommendations are contradictory in nature.

There are three key recommendations which the Telecom Commission 
has found contradictions. The first is on refarming. Even as TRAI has recommended that 900 Mhz of spectrum should be immediately 
refarmed, for some reason it has recommended 800 Mhz to be refarmed progressively.

So, the department of telecommunications (DoT has raised a query regarding the recommendation.

Secondly, earlier TRAI had recommended that the licence fee should be a minimum of 10% of the entry fee. But now TRAI has recommended that the licence fee should be based on Adjusted Gross Revenue (AGR) and should be subjected to a minimum of 5% of the bid amount.

The third contradiction that DoT has pointed out, is the possibility of the auction of 900 Mhz spectrum 18 months in advance when it will only be available once the licences come up for renewal in 2014.

The DoT also plans to seek legal opinion on six issues once TRAI's recommendations are received by DoT which is expected by May 14. These include giving 1.25 Mhz to those licencees which already have 4.4 Mhz as, according to DoT, it would mean a grant of excess spectrum and mortgaging spectrum to banks, one of TRAI's key recommendations. The DoT has pointed out that it will be difficult to securitise spectrum beyond a period of 12 months.

Telecoms CEOs rally against airwaves plans

India's top mobile operators launched a broadside against the sector regulator on Thursday, pressuring the government to reject proposals they say will add billions of dollars to their costs and threaten the survival of some players.

In a rare show of unity, chief executives of Bharti Airtel, Vodafone's Indian unit and Idea Cellular, the country's top three carriers by revenue, lambasted the regulator's proposals for a costly spectrum auction at a joint news conference in New Delhi.

"We believe that they ring the death knell for the Indian telecommunications industry, and also lead to prolonged disputes and litigation," said Sanjay Kapoor, CEO of Bharti's India and South Asia operations.

The once-booming sector has been beset by turmoil after a scandal over the below-market price sale of telecoms permits in a 2008 state grant process, which a state auditor said could have cost as much as $34 billion in lost revenue.

The Supreme Court has ordered cancellation of all the permits granted in the tainted sale and asked the government to redistribute airwaves through an open auction. It would be the last chance for eight carriers including Idea and Telenor's India unit to win back their lost permits.

The sector regulator last week proposed an auction starting price that is nearly 10 times higher than that of 2008 and suggested auctioning just one-fifth of the available bandwidth, which means slots for just one or two carriers per zone.

The industry has slammed the regulator's proposals and is lobbying hard before the government finalises the rules.

On Wednesday, the global CEOs of Vodafone and Norway's Telenor, along with Indian tycoons Sunil Mittal and Kumar Mangalam Birla met several key ministers and government officials, voicing their concerns about the proposals. Mittal controls Bharti Airtel, while Birla is the head of Idea.

India's captains of industry, usually a reticent lot, have become increasingly vocal, in some cases over policy paralysis and in the case of telecoms, over proposed regulations.

Earlier this year, the prime minister pledged help for the embattled power sector after several business leaders including tycoons Ratan Tata and Anil Ambani jointly met him seeking faster coal and gas development for the industry.

'ARTIFICIAL SCARCITY'

In addition to the high price, the regulator's proposal for a limited number of slots risks driving up bid prices, as was the case in an auction of 3G airwaves in 2010.

"One thing is very clear: if you create artificial scarcity then the price is not a real market-discovered price. And that is exactly what has already happened in the 3G auction," said Marten Pieters, chief executive of Vodafone India.

"At the most one new player will survive," said Rajiv Bawa, chief representative officer for Telenor in India, referring to the affected companies, including his own that must win back licences to continue operations.

The operators have demanded an 80 percent cut in the proposed price and said such a high spectrum price could bump up tariffs by up to 30 percent.

Bharti and Vodafone also oppose a move to refarm, or substitute, their more-efficient 900 MHz spectrum bands with relatively inferior quality 1800 MHz band before their licences come up for renewal starting in 2014.

This would mean the operators would have to buy new bandwidth and spend on networks as replacement spectrum will need more mobile masts and new equipment.

Vodafone estimates it would have to spend nearly $2 billion on a new network if New Delhi goes ahead with the refarming. Bharti's Kapoor said collectively the industry would have to spend billions of dollars.

TDSAT asks DoT not to act against Airtel on penalty issue

The telecom tribunal TDSAT today directed the Department of Telecom (DoT) not to take any action against Bharti Airtel , which is facing a fresh penalty of Rs 36.94 crore for allegedly not disconnecting mobile connections with faulty customer details.

A TDSAT bench headed by Justice S B Sinha also reserved its order on the interim plea of Bharti Airtel to stay the 'demand notes' issued by the government in this regard.

On April 3, DoT had imposed additional penalty of Rs 36.94 crore on Bharti Airtel for not disconnecting the mobile connections allegedly having faulty customer application forms (CAFs). The DoT has already imposed a penalty of Rs 111.25 crore after its Telecom Enforcement Resource and Monitoring (TERM) Cells observed 'faulty CAFs' for the months of March 2011, April 2011 & July 2011.

The penalty was challenged by Bharti Airtel before TDSAT, which had asked the operator to pay 25 per cent of the sum charged, while passing an interim order in February this year.

"DoT has originally imposed a penalty for the months of March, April & July 2011, totalling Rs 111 crore, which is impugned by Airtel vide Petition No. 27 of 2012.

"And now vide the order of April 3, 2012, another penalty is being imposed on totally unsustainable and arbitrary grounds which tantamount to penalty on penalty, which is illegal," Bharti Airtel had said in its petition.

The matter is still pending before the tribunal for final adjudication. Meanwhile, Bharti Airtel has termed the additional Rs 36.94 crore penalty for not disconnecting connections having alleged faulty CAF as "penalty on penalty" and termed it as "illegal" and requested the tribunal to quash the same.

"While the dispute regarding rejection of these customer application forms (CAFs) itself is pending adjudication before this tribunal, there is no justification whatsoever for further penalising the Petitioner for not disconnecting these mobile connections and/or taking any other action in that regard," said Bharti Airtel.

TRAI recommendations clearly favour Reliance: Sanju Verma

Earlier this week, TRAI recommended setting the reserve price for the 2G auctions at Rs 3,662 crore, almost 13 times the amount in 2008. Sanju Verma of Violet Arch Securities says this move is clearly in favour of Reliance Industries .

According to Verma, the policy is not in favour of incumbents Bharti , Vodafone and Idea , who will have to shell out a total of Rs 95,000-1,00,000 crore to retain their existing spectrum once it expires in 2014.

On the other hand, she believes the government has gone out of its way to make the policy beneficial for RIL-owned Infotel. "The government has said that it will not allow new players to bid for the 4G airways before 2015, indirectly giving Reliance a head start of two-three years," she said.

Another factor which she thinks will benefit Reliance is the freeing up of internet telephony services. "People who operate in that particular airwave spectrum will be the biggest beneficiaries and the likes of Bharti are going to get adversely impacted because nobody will want to pay 60-70 paise per minute to make an international call when you can make an international call from your landline at 1/10th to the price," she explained. Since this facility is only offered by Reliance Infotel today, Verma says this policy is very partial towards Reliance Industries.
 
Telecom was one of the fastest growing sectors a few years back, with companies adding close to 15-16 million subscribers per month. This number has fallen to 5-6 million, indicating the deceleration with respect to incremental growth in the sector. Due to this, Verma advises staying away from this space altogether. With companies having to pay Rs 40,000-50,000 crore just to stay in the business, Verma questions the viability of doing business in India.

Below is an edited transcript of her interview with Udayan Mukherjee and Mitali Mukherjee. Also watch the accompanying videos.

Q: Since we last spoke, there have been a lot of developments for the market but the April series has been absolutely flat. What do you expect to see in May and June?

A: The FII flows tells you the story with respect to the tepid performance in April. For January and March 2012, FII inflows were in the region of USD 8-9 billion. Come March, that dramatically dropped to something like USD 1.7 billion. In April that decelerated further, and as we speak, I am told the FII inflows number for the month of April to date has barely been a tepid USD 122 million or thereabouts. So clearly the fact that the FII flows were driving the market is a foregone conclusion.

That being the case, and given that the GAAR issue has been top of the mind for most foreign investors for the right or wrong reasons I am not surprised that the market is in a tepid mode. They will perhaps continue to be likewise in the next two months

Having said that, I am not particularly perturbed by this whole brouhaha about the downgrade in the outlook by S&P because that is something which has caught the fancy of almost anyone who has anything to do with the market. My personal sense is we perform best under pressure.

This is a clarion call to the government to get its act together. My personal sense is that you might see a lot more happening from a positive standpoint with respect to reforms getting that necessary boost because we have seen precious little in the last 3-3.5 years odd. Before we go into general elections, assuming we don't have midterm elections, I think now is the time to actually get the act together and the government perhaps have woken up if the comments of Pranab Mukherjee are anything to go by.

TRAI recos very arbitrary: Idea Cellular IDEA MOBILES

The Idea management is taking a hardline on the TRAI's recomendations. Himanshu Kapania, managing director, Idea Cellular says that the recommendations are inconsistent and regressive. Kapania says that Idea will continue to agitate against the cancellation of its licence by the Supreme Court, reports CNBC-TV18's Kritika Saxena.

"Currently, only 50% of the country population uses mobile services. Why should we divert our investments away from voice segment and rural areas where 300-400 million subscribers are yet to be tapped to unprepared wireless broadband services," said Kapania.

The question that needs to be asked, why should India vacate voice market? When none of the countries like the United States, China, Europe and South East Asia have vacated voice market in the 900MHz.

Two days back in the clarificatory application, the Supreme Court has extended the completion of auction for the Government of India till August 31.

It is also clarified that all operative licences should continue to offer services to the customers till September 7. Seven days after the auction process is complete and the spectrum is reallocated.

Kapania said, currently, we reject the proposals of TRAI and hope that the Government of India will also reject the proposal and continue to focus on the directions of Supreme Court and help growth of voice business in the country. We wait for the final directions from the Government of India to take the next course of action.

Challenge for govt to meet SC timeline: Former DoT member

TRAI's recommendations do not address the main issues and it will be a challenge for the government to meet Supreme Court's auction deadline, says Chandra Prakash former member of Department of Telecom in an interview to CNBC-TV18.

Also Read: Will do our best to abide by SC verdict, says Telecom Secy

He also says "that the government will find it very challenging to resolve the issue in the timeline that Supreme Court has now revised. The government should quickly take another recommendation from TRAI and referring it back to them to concentrate on the current issue. It could be very simple to see how many slots are to be filled? What will be the criteria of location?  The reserve price has been kept very high."

On a question, will the government be in a position to reduce reserve price? Prakash says, the government needs to take a bold decision. They have kept only one slot for the new operator.

Keeping a slot only for one operator and that too, not fixed. If the operator does not set in position in the auction, the new operator, either the cancelled or the new ones will not get it. It will be taken away by the existing operators.

The issue was not about allocation of spectrum to the existing operators. It was only for the purpose of replacing the operators with one of these operators or with the new one for the new slots.

TRAI recos sound death knell for sector: COAI (Problems for the Indian Telecom)

In an interview to CNBC-TV18,  Rajan Mathew, director general, COAI (Cellular Operators Association of India) says that the TRAI recommendations have sounded the death knell for the telecom industry in the country.The steep reserve prices, absence of economic viability and logistics hurdles have made investors shirk away from the telecom sector.

Below is an edited transcript of the interview. Also watch the accompanying video.

Q: You have put out a press release saying that the reserve price for the spectrum auction is arbitrary, regressive, and inconsistent. Vodafone and Uninor have also released similar statements. Is there any justification in the telecom regulator fixing a price that is unanimously disliked?

A: I am glad that Sarma (TRAI chairman) has a point of view on this and has reason behind his argument. But from the point of the industry, this is really a sounding of the death knell. A true body blow to the industry for a lot of reasons.

Every person who expressed some interest in bidding in the 2G auction, after looking  at the benchmark reserve prices and shirk away in horror.

The total price has made it un-buyable because if one were to bid a price of Rs 4,500 crore for one Mhz of spectrum and the multiply that by at least 4 or 5 megahertz, the total investment required would be to the tune of Rs 14,000-15,000 crore.

That is certainly going to wipe out any significant viable person coming in. Those already in the industry are thinking twice. There is no viability in the buyback of 900 Mhz at the proposed prices and if one were to bid for 1800 Mhz. There is no correlation between the two and the logistics haven't been carefully sorted.

Q: What does the future hold with the government's support of the recommendations and the telecom minister and secretary saying that the recommendations were very forward-looking? Why isn't the government buying your argument?

A: Hopefully the government will look at the long-term interest of this industry. Currently, there is a not a single viable business operator making money of any sort. We are all in the red. The burden cannot be sustained either by existing players or by new operators proposing to come in. This price tag is going to drive them away.

Q: What does this mean now for tariffs? If the government was to accept the TRAI recommendations and the reserve price as it is, do you actually see any takers?

A: We don't see any particular takers stepping up at this particular price. Those who are bold enough to step up at this particular reserve price ��"the price at which you begin the auction- will go higher than that.

Anybody who has a business plan that makes any money in this scenario is a brave soul indeed. We don't believe that it can work. So, we are telling the government to look at the dichotomy between this 2G pricing and the national telecom policy.

Q: In your press release you said that the regulator's action appeared to be unfair and biased against all operators for reasons best known to it. Has this the government put out a reserve price in its quest for revenue maximisation or is it really trying to undo what happened in the 2G scam?

A: I wish I knew the exact reason. But again this dichotomy is becoming difficult to escape.

The government, in its National Telecom Policy (NTP), said that the sector was not a cash cow and would not maximise revenue from the sector because of the cascading effect. It's a well-known fact that a 10% increase in telecom density leads to a 1.4% increase in GDP.

These types of metrics have also got to be taken in and see in terms of the total context. You can't isolate a sector and maximize revenue. If that's the intention, I am afraid that it is not going to go anywhere.

Datawind accuses Indian Cellular Association of defamation

There's a new development in the series of Datawind controversies over Aakash.  After blaming IIT Rajasthan and its assembler Quad Electronics, Datawind now vents its anger on the Indian Cellular Association (ICA). Reportedly, the Aakash maker has now sued the ICA for making defamatory remarks. Apparently, the ICA had made some statements harming the commercial interests of the company.  The statements wriiten to the ministry of Human Resource Development said that bigger companies such as Samsung and Nokia would be in a better position to handle the Aakash project.

 

 

End of the road?

 

"We have sent a legal notice to them for spreading false reports against us in the media and in government meetings including places such as the department of IT," Datawind CEO Suneet Singh Tuli told ET. Reportedly, Pankaj Mohindroo, president of the Indian Cellular Association confirmed to have received the legal notice. 

Earlier, Datawind had blamed IIT Rajasthan for the failure of Aakash for over-emphasizing on concerns regarding Aakash's quality and functionality, allegedly to favour other firms. He had said that as part of the initial order of supplying 1,00,000, they had supplied 10,000 tablets to IIT-Rajasthan. He alleges that as soon as the tablets reached few students (as part of a pilot project), the institute began rejecting the tablets after there were reports about the device not being upto the standards set by the institute and that it failed during the pilot testing. The most recent incident has been the Datawind-Quad Electronics episodes. This row got muckier with Quad Electronics suing Datawind over pending payments. 

Tuli said that Quad Electronics breached Datawind's intellectual property, circumvented their relationship with IIT-Rajasthan, signed a direct MoU with them and then sold off their inventory in the open market. So, they will not be procuring any further tablets from the assembler. We wonder who is next to appear in the blame game and how badly this would affect the Aakash shipments.

Vodafone agrees to buy Cable & Wireless Worldwide

Vodafone on Monday agreed to buy corporate telecoms company Cable & Wireless Worldwide(CWW) for 1.04 billion pounds (USD 1.68 billion) in a deal that adds a British fixed line network to its wireless network.

Vittorio Colao, chief executive of Vodafone, said: "The acquisition of Cable & Wireless Worldwide creates a leading integrated player in the enterprise segment of the UK communications market and brings attractive cost savings to our UK and international operations."

Vodafone is offering CWW shareholders, who have had a torrid time since the group split from the former Cable & Wireless in March 2010, 38 pence a share in cash, a 92% premium to the price before it declared its interest in February.

CWW has issued three profit warnings, had the same number of chief executives and has suspended it dividend since it split.

But it has a fibre network that would increase capacity for Vodafone, and it has contracts to provide voice, data and hosting services to British government departments and companies.

McAfee: Malware surging on mobile platforms, especially Android

Mobile platforms are anything but safe from malware, based on the second quarter Threats Report from McAfee.

Android, in particular, was found to be the most vulnerable mobile operating system on the market, as malware targeted towards Google's OS has skyrocketed 76 percent since the previous quarter. That's a very sobering statistic for both Android developers and device owners.

McAfee went so far as to call Android the "most attacked mobile operating system," surpassing Symbian OS as the most popular target. Still, Symbian OS and Java ME remain the most targeted to date.

Because of the rapid escalation, McAfee has dubbed this situation as a "Malware Zoo," as McAfee researchers predict that the the grand total of total malware samples will reach at least 75 million by the end of 2011. The total currently stands at approximately 65 million.

Vincent Weafer, senior vice president of McAfee Labs, explained in a release:

This year we've seen record breaking numbers of malware, especially on mobile devices, where the uptick is in direct correlation to popularity. Overall attacks are becoming more stealth and more sophisticated, suggesting that we could see attacks that remain unnoticed for longer periods of time. High-profile hacktivist groups have also changed the landscape by drawing a line between attacks for personal gain and attacks meant to send a message.

McAfee warned that malware, particularly for Android, could appear in "everything from calendar apps, to comedy apps to SMS messages to a fake Angry Birds updates."

Other highlights from the study:
Apple has become more of a target for malware authors as more Mac OS X computers are being affected by fake anti-virus software
Stealth malware has increased more rapidly in the last six months than in any previous period with an increase of nearly 38 percent than the same time last year
Hacktivists, primarily Anonymous and LulzSec, were among some of the most prominent cyber news generators for Q2
At least 20 global attacks were reported in Q2 alone, and with the majority allegedly stemming from LulzSec

On the bright side, spam is being issued at historically low levels.