STel to end network operations in India (India)
Telecom operator STel, has been asked to shut down its network in Indian regions – Himachal Pradesh, Orissa and Bihar, by the Department of Telecom (DoT). According to reports, the decision was taken owing to security concerns. P. Swaminathan, Director, STel Pvt Ltd, said that they have received the government notice but details for the same have still not been given.
As per reports, Swaminathan has said that they have got the letter from the DoT, but it does not explain why they are being asked to shut down operations. They would like to ascertain the exact reasons for this decision so that they can help the Government in resolving any issue. Further, they had started offering services only after they received all permissions from various Government authorities; so this comes as a surprise to them.
Recent reports confirm that the operator is planning to shut down its operations in the country and has also helping consumers to switch to other operators by encouraging them to avail of the mobile number portability (MNP) service.
Following the Supreme Court’s decision to cancel 122 licences awarded in 2008, STel’s partner Bahrain Telecom also agreed to sell its stake in STel to Sky City Foundation for USD174.5 million. After considering all factors, the operator believes that shutting down its operations seems to be the best step.
Idea Cellular asks Supreme Court for clarification on licence cancellation (India)
Indian telecom operator Idea Cellular has asked for clarification regarding the Supreme Court’s order for cancellation of 122 licences auctioned in 2008, which impacts 13 licences held by Idea. According to reports, the operator has claimed that it had applied for the licence in June 2006, which should have been processed within 30 days but were delayed until 2008. Idea says that if the applications were processed on time, it would not be affected by the Supreme Court’s judgement.
As per sources, Idea has said that the clarificatory application has been filed, seeking further direction from the Hon’ble Supreme Court. Other telecom operators such as Telenor (operating in India through Uninor) and Bahrain Telecom (partnering with STel in India), have also been affected by the apex court’s decision.
Bahrain Telecom closed its operations in the country following this decision, while Telenor approached the Norwegian government to come to its aid and protect its investment.
The decision was taken in an attempt to root out corruption in the Indian telecom industry as the Supreme Court felt that the licences had not been obtained by legal means. However, this decision has not been received well by the affected operators who have been considering a legal retaliation in order to protect their investment.
RCom shortlists vendors to outsource network management (India)
Indian telecom operator, RCom (Reliance Communications), may be planning to outsource its network management for which it has identified certain vendors. According to reports, the operator is considering vendors such as Ericsson, Alcatel-Lucent, Huawei Technologies and ZTE, for the deal which may be worth US$ 3 billion, for a period of five years.
Sources claim that the deal would consist of outsourcing end-to-end management services and will include all services with the exception of consumer and IT services. The agreement, expected to be finalized in the coming months, is considered to be largest outsourcing contract by a telecom operator.
Currently, RCom has a 50:50 joint venture with Alcatel-Lucent, for managing its networks. However, sources claim that the operator now wants to tie up with a single vendor for outsourcing all network management services, and Alcatel-Lucent is one of the shortlisted vendors.
Rival telecom operators, Bharti Airtel and Vodafone have also outsourced their network management, but have tied up with multiple vendors.
Company officials are yet to issue a statement regarding the same.
Indian IT department asks Supreme Court to review Vodafone tax case (India, UK)
The Indian Income Tax department has asked the Supreme Court to review its decision in the Vodafone tax case. The Supreme Court had favoured the British telecom giant in its ruling, claiming that Vodafone was not required to pay taxes amounting to US$ 218 billion for the acquisition of Hutchison Whampoa Ltd’s Indian wireless business in 2007.
Chief Justice S.H. Kapadia, who gave the judgment, claimed that the government has no jurisdiction over Vodafone’s purchase of mobile assets in India, as the transaction took place in Cayman Islands between HTIL & Vodafone. Further, the apex body had also ordered the income tax department to return the US$ 495 million amount submitted by Vodafone during the trial, along with a 4 percent interest.
Justice Kapadia had claimed that shareholding in companies incorporated outside India is property located outside India. Where such shares become subject matter of offshore transfer between two non-residents, there is no liability for capital gains tax.
As per sources, the department’s appeal for a review is their final attempt to save face, and has not been received well by the industry. The decision by the Supreme Court was considered to be a landmark judgement in the Indian telecom industry, with many operators believing that this could encourage foreign investment in the nation.
Sources claim that the review plea may be considered by the court on 27 February 2012.
Telenor to start new venture in India (Norway,India)
Norwegian telecom company, Telenor Group has issued a notice to Indian partner, Unitech Ltd., seeking compensation and indemnity, following the Indian Supreme Court’s order to cancel 22 licences held by the firm in India.
As per a report by the company, the Telenor Group holds Unitech Ltd. liable for the breach of warranties related to the cancellation of the licenses – seeking compensation for all investment, guarantees and damages caused by the Supreme Court Order. Telenor Group also makes an indemnity claim against Unitech for the failure to obtain spectrum in the strategically critical Delhi circle.
Pal Wien Espen, Group General Counsel, Telenor Group has said that the legality and validity of the licenses was a fundamental term of the share subscription agreement between Telenor Group and Unitech Limited. Further, they believe that the Supreme Court’s cancellation of the Unified Access Service Licenses (UASL) conclusively demonstrates a clear breach of Unitech’s warranties.
Espen added that the fact is that Uninor as a consequence of the judgment will no longer hold any UASLs. Telenor will therefore exercise its entitled right under the share subscription agreement to hold Unitech Ltd. liable to indemnify and compensate Telenor Group for its investment in India.
However, the company claims that they intend to continue their operations in the country through another venture, and are on the lookout for a new Indian partner. As per a company statement, this new entity will serve as the platform to approach the upcoming auctions for fresh licences as mandated by the Supreme Court. As a part of this process, the new entity will also seek requisite approvals from the Foreign Investment Promotion Board (FIPB) to allow Telenor Group to take up 74 per cent ownership. The telecom firm added that till such time that Uninor’s business is transferred to the new Indian company, Uninor operations will continue as before.
According to reports, Unitech has retaliated saying that it is shocking that Telenor intends to transfer the entire business to a new affiliated entity owned by itself. This not only shows complete disregard and oppression of the minority shareholder by Telenor, but is also against all principles of related party transactions. Telenor cannot transfer any assets of Uninor without the consent of Unitech because they have veto right in the shareholders’ agreement as well as in the articles of association for such matters.
Mobile phones to aid infrastructure development (India)
Villagers in India suffering daily due to lack of good infrastructure can now initiate action by clicking a picture of the concerned area on their mobile phone, and forwarding the same to the Union ministry of programme implementation, reports ET.
Srikant Jena, minister for programme implementation, has said that they are working on a proposal so that a complaint can be filed through mobile phones. Anyone can take a picture of a substandard road constructed under the Pradhan Mantri Gram Sadak Yojana, or a poor quality house built under the Indira Awas Yojana, and send it to them. The ministry will inquire and act.
He added that lower-level corruption in the implementation of central schemes is worrisome, as a large amount of the funds allocated for infrastructure development, does not reach the targeted segment. Jena claimed that it is important to monitor the transfer and utilization of funds at the lowest level to ensure that the funds are being used in the correct manner.
The move comes following gross misuse of funds in the National Rural Health Mission (NRHM) in Uttar Pradesh. The scam acted as a wakeup call for the ministry, which is now seeking to implement a system enabling regular monitoring of funds and quality inspection, at the low levels.
Bharti Airtel and Vodafone respond to new telecom policy (India)
Under the new policy, government has said yes to 2G spectrum sharing amongst telecom operators. However, the new policy doesn’t grant any sharing permission to 3G spectrum holders. Telecom incumbents have responded very positively to the new policy.
According to reports, Bharti Airtel stated that the new set of guidelines will contribute in the future growth of the telecom sector. Telecom giant Vodafone approved of the policy and stated that it totally supports the uniform license concept and welcomes the decision of allotting licenses via auctions. The policy laid down for mergers and acquisitions is also applauded by Bharati Airtel, as the company felt that it would prove fruitful for the telecom sector in the coming years.
Airtel also supported the concept of uniform license, however, the company counts on the Telecom Ministry to reduce the license fee to 6 per cent in the near future. Bharti Airtel opined that even though 2G spectrum sharing is a wise decision but the government should also have allowed sharing in all bands.
Government’s plan to begin a research and study on Universal Service Obligation Fund (USOF) of India is also welcomed by Bharati Airtel. The company stated that government’s decision on USOF will attract investment options in telecom sector. Vodafone has also applauded the move and stated that the company was glad that government had thought about studying USOF schemes in a comprehensive manner.
Battered partnership of Telenor – Unitech (India, Norway)
The Telenor Group has issued a notice to its Indian strategic partner Unitech Ltd., soliciting compensation for damages to their mobile venture. Issuance of notice was an outcome of the Indian Supreme Court’s verdict, where it has ordered the cancellation of 22 Uninor licences. The licences were cancelled in light of a telecom scandal in 2008. As per the partnership, 67.25 per cent of the company was owned by Telenor, and the company has alleged that Uninor has breached the confidentiality obligation.
According to sources, the partnership hit a bitter note in 2011 when Unitech stayed out of Uninor’s US$ 1.7 billion rights issue and as a continuation to the split saga, the involvement of Unitech boss Sanjay Chandra in the 2G scam case compelled Telenor to ask for his resignation as the chairman. Further on, in October last year, Telenor was accused of complete mismanagement by Unitech and the case was cited to the Company Law Board.
Telenor has estimated the total worth of the mobile company to be around US$ 2.22 billion -2.42 billion, but inspite of disapproving the calculated figure by Telenor, Unitech has offered to purchase Telenor’s 67.25 per cent share as per the aforesaid calculation. Every allegation raised by Telenor has been rubbished by Unitech and affirmed that the company has not committed any breach of confidentiality.
Bharti Airtel launches online self care service for prepaid segment (India)
India’s leading global telecommunications company Bharti Airtel, has announced the launch of India’s first online self care services for its prepaid mobile customers across the country. With this, Airtel’s prepaid subscribers can log onto the company website to access and manage their mobile accounts.
According to company reports, ‘Prepaid My Account’ is a simple, secure and convenient way for Airtel prepaid mobile customers to access a whole host of functionalities including checking balance, recharging, starting / stopping VAS services, provisioning 3G, raising and tracking service requests, viewing last 5 recharge details, among others. Airtel prepaid mobile customers can visit the new self care website to receive and activate customized offers on ‘my airtel, my offer’ (MAMO), view tariff & top up options, request for the itemized bill and more.
The company has launched this online self service capability for its prepaid customers, as part of its ongoing effort towards delivering the best customer experience in the digital space and empowering customers with a convenient way of managing their prepaid mobile accounts at any time of the day.
