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.
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 seeks help from Norway to protect Indian investment (Norway, India)
Following the Supreme Court ruling in India wherein it revoked 122 2G licences, telecommunications company Telenor has turned towards the government in Norway to help protect the future of its US$ 2.9 billion investment in India. Telenor controls a 67.25 per cent equity stake in Unitech Wireless and offers nation-wide mobile services under the brand name Uninor.
According to reports, Rigmor Aasrud, IT Minister, Norway met with India’s Telecom Minister Kapil Sibal to arrive at Telenor’s future in the country following the cancellation of the licences. After the meeting Aasrud said that they had a good, fruitful and constructive meeting with the telecom minister and they took up Telenor’s case along with other issues.
Kapil Sibal stated that both the IT minister and the Telenor official met him to share their perceptions and they had a dialogue on this issue. He told them that the SC verdict will bring clarity to the sector, the sector is robust and enough spectrum is available. Further, the National Telecom Policy 2011 which will be put out will be fair and robust.
Sibal added that India’s market is full of opportunities and no-one should be in doubt on the investments to come into India.
Sigve Brekke , managing director, Uninor has said that they are talking to the government because they need to protect their investment and they also need to make sure that there is a framework for continuing their operations in the country.
Lawyers say Etisalat’s deal violated foreign investment rules (India)
A lawyer for the federal investigative agency has stated that Etisalat’s 2008 deal to acquire a stake in an Indian telecoms firm, Swan Telecom, violated Indian rules on foreign investment and foreign exchange.
The federal investigators are probing into a multi-billion-dollar telecoms licensing scam. The Supreme Court is monitoring the probe by the federal agency.
Vodafone still considers no tax to pay (India)
Vodafone has stated that it continues to believe that it had no tax liability over its 2007 purchase of Hutchison Whampoa Ltd’s mobile business in India.
Vodafone, which has been fighting a $2.5 billion tax bill in India over the deal, stated its position had not changed with regard to the tax case.
According to the company, every adviser they have consulted, both during the transaction and since, is in unanimous agreement that no tax liability should arise.
India’s Supreme Court will hear the tax case on July 19 and Vodafone has stated thet it would continue to defend its position vigorously.
