TDSAT directs Uninor to pay 60% penalty (India)
Telecom tribunal TDSAT has directed Uninor to pay 60% of the penalty, demanded by the Department of Telecom (DoT), for failing to launch services within the stipulated period.
The Telecom Disputes Settlement and Appellate Tribunal bench, headed by TDSAT chairman Justice S B Sinha, allowed Uninor’s plea but directed it to pay around US$1.98 million within two weeks.
According to TDSAT in an interim order, in their opinion, keeping in view the interest of the parties, interest of justice would be sub served if the petitioners Uninor are directed to deposit 60% of the demanded amount within two weeks.
The tribunal observed that Uninor has raised the issue of delays in getting the start up spectrum from SACFA (Standing Advisory Committee for Frequency Allocation) and it needs to be determined by the bench.
According to bench, Uninor, in their opinion, have raised a prima facie case in as much as the question as to what is meant by start up spectrum or average delay are questions involving interpretation of different provisions of the licence about the other documents filed by it.
Rejecting DoT’s contention, TDSAT observed that the government should have given an opportunity to Uninor to give its opinion before demanding Liquidated Damages (LD) for delays in roll-out obligations.
Later, Uninor stated that they welcome the TDSAT’s interim order today that acknowledges the merit of our arguments.
Uninor, a JV between Unitech and Norway’s Telenor had approached TDSAT on January 4, challenging DoT’s directive.
Telcos pay penalties for missing roll-out obligations? (India)
Certain new telecom operators including Etisalat DB are understood to have paid penalty to the government after facing cancellation of licences for missing launch obligations.
According to sources, Etisalat DB, a joint venture between Swan Telecom and UAE-based Etisalat, has paid about US$2 million to the Department of Telecom (DoT) for missing the deadline to launch its network or expand services in four circles.
Uninor, a joint venture between realty major Unitech and Norway’s Telenor, has stated that the company has paid the penalty as demanded by DoT, however, under protest.
According to company’s statement, various factors, including delay in clearances required for each site, new last minute pre-launch testing requirements and new equipment security clearance processes, came in the way of roll out and were beyond their control. They have requested the DoT to consider these in its assessments. As a serious long term operator with considerable presence in India, they intend to continue delivering the benefits of competition to customers in the country.
Some more operators’ including Loop Telecom and Videocon are also facing action for missing the roll-out deadline, but it could not be ascertained if they too have paid the penalty.
VimpelCom approves a revised merger with Weather Investments
VimpelCom’s Board of Directors has approved the proposed merger of VimpelCom and Egypt based Weather Investments but added that it did not take a decision on certain shareholder-related issues.
As expected, six of the nine directors, including all three independent directors and the three Altimo-nominated directors, voted in favor of the Transaction, with the Telenor-nominated directors voting against the Transaction.
The Supervisory Board did not approve an amended Shareholder Agreement or vote on other shareholder-related agreements due to Telenor’s publicly stated position that, in its capacity as a shareholder of VimpelCom, it does not support the merger.
According to VimpelCom, in light of Telenor’s opposition as a shareholder, at this time no agreement has been reached with respect to the shareholder related agreements that were contemplated to be entered into in connection with the transaction.
Therefore, the Board has authorized the Company’s CEO to review and take into account the rights and obligations of the parties under the current VimpelCom Shareholders Agreement and bye-laws, and to negotiate further with Weather the terms and conditions under which Weather would be willing to enter into a revised transaction, taking into account that the Shareholder Related Agreements are unlikely to be signed and delivered. The Board has instructed the CEO to bring such revised terms, if any, back to the Board for consideration and approval.
VimpelCom shareholder, Telenor not supporting Weather deal (Russia, Norway)
VimpelCom’s Norwegian shareholder Telenor would not support the Russian mobile phone group’s $6.6 billion bid for Weather Investments citing available information and recent developments.
According to the company, they don’t believe this transaction makes strategic or financial sense for VimpelCom’s shareholders.
Telenor holds a 36% voting right in VimpelCom. VimpelCom’s board is due to discuss the transaction at a board meeting on Tuesday.
According to VimpelCom earlier reports, it wanted to buy Weather, which includes control of Egypt’s Orascom Telecom and Italy’s Wind from Egyptian tycoon Naguib Sawiris.
India threatens to cancel licenses of 85 telcos
The new telecom Minister Kapil Sibal has stated that the Indian government is planning to send 85 notices to telecom operators questioning their licenses.
According to officials, Kapil Sibal took the top spot in India’s telecom ministry earlier this month after Andimuthu Raja was forced to resign, accused of granting 2G spectrum and licenses at low prices and possibly costing the state $39 billion in revenue.
According to Sibal, many of the companies, which went through a self-certification process, were not eligible for the 2G licenses granted in 2007 and 2008. This has serious implications for transparency of process. It allow companies to get ahead of the queue on basis of first come first served, in that they did not register first with the registrar of companies. Notices will be sent to the companies mentioned in a report by the Indian government auditor.
The report named Uninor, a unit jointly owned by Unitech and Norway’s Telenor, Etisalat DB Telecom, into which Swan Telecom and Allianz Infratech later merged, Loop Telecom, Videocon Telecommunications and S Tel.
Sibal added that the companies would have 60 days to reply and 52 weeks to fulfill rollout obligations, failing which their licenses could be revoked.
Telenor finds no irregularity with India 2G licenses
Norway’s Telenor has reportedly denied that its Indian subsidiary Uninor had won mobile phone licenses in an irregular manner.
India’s telecoms regulator has called for 38 mobile licenses, including some held by Uninor, to be canceled amid a political scandal that is shaking the government of Prime Minister Manmohan Singh.
As per TRAI, the licenses were awarded too cheaply, and may have cost India a potential $31 billion. The accusations have led to the sacking of Telecoms Minister Andimuthu Raja.
According to Telenor spokesman Glenn Mandelid, the company has now investigated how their licenses were awarded and have not found any irregularities.
As per Mandelid, the award system in 2008 was not the same as todays. Indian authorities feared the telecoms market would turn into a monopoly so they operated under a first come first served principle. The award system was the same from 2000 to 2008 when Unitech got its license. Since then they have gone over to an auction system.
Telenor has about 13.5 million customers in the country’s highly competitive mobile market.
Vodafone and Telenor to expand mobile money services
Vodafone and Telenor both plan to expand their mobile money services in emerging markets to include new services like saving accounts, micro credit lending, insurance and international remittances.
In a mobile money session at Congress this morning, Greg Reeve, head of mobile payment solutions at Vodafone, learned that how the company’s Kenyan subsidiary- Safaricom has already expanded its pioneering M-PESA mobile payments service to work as a savings account.
He took an account of some 21% of M-PESA users in Kenya now use the service simply to store money and earn interest. The savings service named as M-KESHO and in partnership with Kenya’s Equity Bank has effectively set-up 750,000 new bank accounts in Kenya since launching in May with deposits totaling US$10.7 million.
Service started only after Government nod and FIPB approval: Telenor
Uninor, a joint venture of Norway’s Telenor and Indian realty firm Unitech, which is in the eye of a storm over CAG revelations on 2G spectrum allocation, stated that it started operations in India only after getting all government clearances.
According to Uninor Managing Director Sigve Brekke, the company entered Indian market by clearing the license obligation. They also asked the government for FIPB approval allowing them to own above 50%.
Getting government approval and also FIPB nod means the application has been scrutinized twice, first by the Department of Telecom (DoT) and then by the Ministry of Finance for acquiring more than 50% stake in Unitech Telecom Services.
He, however, added that the company is taking a cautious approach towards investments, particularly in a daily changing environment of the Indian telecom industry.
As per Brekke statement, the company entered India with the clear understanding that everything is OK and they have invested in US$ 1.2 billion, have 40 million subscribers of Uninor already. So they will see what the Government is doing as its responsibility.
No immediate plans to increase stake in Uninor: Telenor (Norway, India)
Norwegian telecom firm Telenor has revealed that it has no immediate plans to increase its stake in Indian joint venture Uninor, but indicated the company will continue to make investments for increasing mobile penetration in the country.
According to Telenor Group CEO Jon Fredrik Baksaas, the company doesn’t have immediate plans to increase stake in the Indian venture. However, it will continue investing in India to increase the mobile penetration here.
Telenor holds a 67.3% stake in the joint venture with Unitech Ltd, an Indian real estate company.
As per Baksaas, the India venture added 2.5 million new mobile subscribers in October. The telecom venture offer services under the brand Uninor and has operations in 13 of India’s 22 telecom service areas. He added that the company sees great potential in the Indian market, where mobile phone usage is growing at the fastest pace in the world. He feels that real penetration of mobile services is very low in the country, especially in rural areas. The rural market will be a key focus area for Uninor’s growth.
Orascom’s Sawiris dubious on VimpelCom merger (UAE)
As per reports, citing Orascom majority owner Naguib Sawiris, the chances of completing a $6.6 billion merger between Orascom and Russian mobile operator VimpelCom were at best 50%.
The report quoted that Norway’s Telenor, which owns nearly 40% of VimpelCom, was not motivated to see out the merger, which faces barriers in Algeria as well as regulatory issues in other countries.
According to Sawiris, now, he doubts anything will come from the merger. Telenor is not motivated, as he sees it. Its 50-50 at best that anything will come of it.
Algeria is threatening to nationalize Orascom’s local unit, and Orascom has assets in Bangladesh and Pakistan where Telenor also has mobile operations.
Telenor has repeatedly aired doubts over the VimpelCom-Orascom deal. Last month it asked for clarification of the merger parameters before VimpelCom’s board makes a final decision on the deal.
