Indian finance ministry proposes spectrum as collateral for loan (India)
The Indian finance ministry has proposed a new policy according to which mobile operators can use their spectrum holdings as collateral for a loan, as reported by ET. The move comes as an attempt to smoothen the functioning of the banking sector as well as help the telecom industry meet its credit requirements.
According to the report, the new policy will enable banks to seize an operator’s airwaves in the event of default or termination of mobile licences. Airwaves are leased to mobile operators by the government for a period of 20 years.
The banking industry has been reluctant to provide loans to mobile operators owing to depleting earnings and slow growth. Further, with the debt faced by the telecom sector mounting up to US$ 56 billion, the finance minister is hopeful that the new regulation will infuse the wireless industry with funds required by operators to increase their business.
3G network expansion project to be held this year: Chairman
The Chairman of TOT Plc has claimed that he will resign if the bid for the state telecom enterprise’s 632.90 million 3G network expansion project fails to materialize by the end of this month.
According to Areepong Bhoocha-oom, the permanent secretary of the Finance Ministry, bidding documents could be sold by next week so that the bid could be called by the end of the month and the contract with the winner will be signed in February. If this timetable is not met, he would review himself.
Mr Areepong added, he had worked hard to get the wireless broadband project off the ground but the selling of the bidding documents was behind schedule because of legal problems related to the terms of reference.
According to TOT president Varut Suvakorn previous statements, the bid could be delayed to January because of the longer-than-expected documentation process.
Mr Areepong further stated that the Office of the Attorney General was reviewing the legal issues and had returned some documents to TOT for revisions.
However, the delay would not be long and the contract signing would still be held in February as scheduled.
Simultaneously, TOT is seeking financing sources, with project details ready to be submitted to major Thai commercial banks within the next two weeks.
According to sources, the bid terms were being revised because of the struggle between two Chinese telecom giants that are long-time competitors for state telecom projects.
Post Vodafone Tax Case, India scrutinising all major deals
The Indian Finance Ministry has announced that it is looking into tax implications of all large cross-border mergers and acquisitions, against the backdrop of the Supreme Court decision in the Vodafone case.
According to Revenue Secretary Sunil Mitra, the Department of Revenue is looking at all large financial transactions. The department is definitely looking at cross-border transactions which are a recent phenomenon. They have started these transactions since 2006, so there is need to have a look and study them thoroughly.
As per Mitra, Vodafone came in the middle of 2007. The department has been looking into a number of cases, acquisitions that have happened through overseas transactions.
The case is related to a deal in 2007 when Vodafone, through its group firm Vodafone International Holdings, bought Hutchison Telecommunications India’s (HTIL) 67 per cent stake in Hutchison Essar for over USD 11 billion.
As per the officials, the tax demand has been raised in pursuance to the direction of the Supreme Court of India dated September 27 to the Income Tax Assessing officer to determine and quantify the tax liability of Vodafone within four weeks.
Last month, the Supreme Court had refused to stay with the judgement of High Court, which ruled that Indian Income Tax Authorities have jurisdiction to tax Vodafone on its deal with Hutch.
Stephane Richard set to be France Telecom SA’s deputy CEO
www.WirelessFederation.com/news: Head of French operations of French telecom magnate, France Telecom SA, Stephane Richard will take over the post of deputy chief executive from January next year. The appointment was made after the request by company’s chief executive officer Didier Lombard who himself will step down in 2011.
Stephane Richard is in the line of succession for the post of CEO and earlier worked as a senior official in France’s finance ministry. He took the role of running domestic operations in October this year.
He started his stint as head of the international operations of French telecommunications giant last summer.
Dutch State Sells Rest of KPN Stake for EU1.7 Billion
The Dutch government agreed to sell its remaining 8 percent stake in Royal KPN NV, the biggest Dutch phone company, for about 1.7 billion euros ($2.17 billion) to lower debt.
KPN will buy 80 million shares for about 800 million euros, The Hague-based company said today in an e-mail. Goldman Sachs Group Inc. and Citigroup Inc. are today selling 87 million to money managers, the banks said in an e-mail to clients.
The Dutch state is selling stakes to foster competition and generate cash to pay down debt. The government has raised at least 10 billion euros since 2003 selling stakes in 18 companies including KLM Royal Dutch Airlines NV and TNT NV, which operates the Dutch postal service, before today.
“The government is a smart investor and usually picks the right time to sell,” said Philippe Kiewiet de Jonge at ABN Amro Asset Management in Amsterdam, who helps manage 480 million euros, including KPN shares. “It means something that the state is selling against this price. From this level, KPN needs an extra push to rise.”
Shares of KPN, headed by Chief Executive Officer Ad Scheepbouwer, fell as much as 19 cents, or 1.9 percent, to 9.85 euros and traded at 9.88 euros as of 10:05 a.m. in Amsterdam. Before today, shares had gained 19 percent this year, while the benchmark AEX-index rose 9.5 percent.
Swisscom, Telekom Transactions
European governments have been cutting stakes in their country’s former phone monopolies as they further open up telecommunication markets. Switzerland’s government last week sold a $1.8 billion stake in Swisscom AG, the country’s largest phone company, three months after lawmakers blocked a proposal to sell the shares to the public.
In April, Germany’s state-owned development bank sold a 2.68 billion-euro stake in Deutsche Telekom AG, Europe’s largest phone company, to Blackstone Group LP, a New York-based buyout firm.
The Dutch government first sold shares in an initial public offering in KPN in 1994 and owned 8 percent of the company before today’s sale, according to the Web site of the Finance Ministry.
In December, the state gave up its golden share in KPN, which gave it veto rights over decisions such as mergers, takeovers and share sales, removing a hurdle to a potential takeover of the former Dutch phone monopoly.
Lowering Borrowings
The Dutch state plans to use the proceeds of about 1.7 billion euros to lower borrowings, said Finance ministry spokesman William Lelieveldt. NM Rothschild & Sons Ltd. advised the Dutch government on the sale.
The Netherlands’ debt is forecast to drop to 265.3 billion euros next year from 265.7 billion euros in 2006, according to the 2007 budget presented to parliament by Finance Minister Gerrit Zalm on Sept. 19.
KPN is eliminating about 8,000 jobs by the end of 2009 to increase profit margins. The company is also investing in services such as digital television as customers flee its traditional phone service for competitors including Tele2 AB.
Takeover Target?
“This step might further increase takeover speculation,” Frank Claassen, an analyst at Rabo Securities in Amsterdam, wrote in a note to investors. “We did not consider this last 8 percent stake of the Dutch state to be a major hurdle.” He rates KPN shares “hold.”
“KPN may indeed be a takeover target, but it may easily take another” one to two years, according to Claassen.
The company said last month second-quarter net income doubled to 464 million euros on job cuts, higher German mobile revenue and new services including Internet calls. The company raised its full-year earnings forecast.
Source- http://www.bloomberg.com
Technorati : KPN, Mobile, Netherland, Swisscom Mobile
Ice Rocket : KPN, Mobile, Netherland, Swisscom Mobile
