Source: The Economic Times, April 11, 2012
New Delhi: Bharti Airtel, the world’s fifth largest telco by customers, on Tuesday became the first mobile phone company to launch fourth generation services in the country from Kolkata, getting a head start over Mukesh Ambani’s Infotel Broadband that is tipped to roll out broadband wireless networks by June.
Source: The Hindu Business Line, Feb 27, 2012
New Delhi: Following the Supreme Court’s order quashing 122 telecom licences, global telecom body GSMA has asked sectoral regulator TRAI to outline quickly the future course of action to bring in transparency and 
certainty to investments made in the sector.
In a letter to the Telecom Regulatory Authority of India (TRAI), GSM Association (GSMA) said, “it is important to now move quickly to outline the process that will provide a rapid resolution to this situation.”
“Key to this will be to ensure that the new process guarantees the principles of fairness, transparency and certainty to all who have been investing in India in good faith,” GSMA said in the letter.
Earlier this month, the Supreme Court cancelled 122 licences allocated by the then Telecom Minister, Mr A. Raja.
Since then, two foreign companies — Bahrain Telecom and Abu Dhabi-based Etisalat — have announced their exit from India.
Another operator Loop has written to Prime Minister, Dr Manmohan Singh, asking the Government to return the licence fee paid by the company along with interest.
“The current situation has put at risk the existing investment of billions of US dollars in the mobile network infrastructure, in a sector that either directly or indirectly employs almost 10 million people and serves more than 894 million consumers,” GSMA said.
Since the deployment of mobile networks is capital intensive and the return is long-term, “uncertainty is particularly damaging to the future growth of India’s mobile sector,” it added.
GSMA said the uncertainty generated by the current legal situation also runs the risk of deterring much-needed investment in 3G and 4G networks.
The GSMA has also extended its participation in an open dialogue on this situation with the Government, to ensure fairness in the future auction process and maintain confidence in India’s position as a secure place to do business.
Source: Business standard, Dec 28, 2011
New Delhi: The Telecom Commission’s decision on mergers and acquisitions (M&A) may pave the way for consolidation between larger companies in the telecom sector.
The decision is to allow M&A between entities with a combined market share up to 35 per cent, and with permission for those with a combined share from this level to 60 per cent. This denotes full acceptance of the Telecom Regulatory Authority of India’s (Trai) recommendations.
However, it would not provide any special fillip to the new operators which received licences in 2008. Together, they have a market share of less than seven per cent. Also, they could have been acquired by any of the bigger boys as the current limit for M&A is 40 per cent of the market share.
So, STel, Videocon, Loop and Etisalat DB, for instance, have been looking at an exit policy from the government, which is being worked out.
Under the new rules, in the Delhi circle, it would theoretically be possible for Airtel to merge with Aircel or Idea Cellular, and be considered for a merger with Vodafone. Airtel has 20.51 per cent market share based on Trai data of August 2011, Aircel has 5.40 per cent, Idea Cellular 10.4 per cent and Vodafone 19.7 per cent.
An entity after a merger would be able to hold up to 25 per cent of the total spectrum available with all the operators in the circle.
Ernst & Young partner-telecom practice Amit Sachdeva said, “The decision to relax M&A norms is a step in the right direction, but more clarity is required. It would help existing operators in acquiring a small operator. Even the 25 per cent spectrum limit for a merged entity is a positive step.”
An executive from a leading operator said the new norms would give enough room to big players to merger with another one and definitely pave way for consolidation in the industry. However, the new guidelines to be formulated by Trai will have to be seen before operators start thinking of any big merger.
Currently, according to the rules, the combined entity after a merger can have 40 per cent of the market share and are allowed to retain the spectrum, provided they fulfill the subscriber linked criteria within three months of merger. There is also a three-year lock-in period now.
Communications and information technology minister Kapil Sibal had said the M&A policy would put a minimum limit of six operators, including PSUs — either MTNL or BSNL — in a circle.
Bharti Enterprises Chairman Sunil Bharti Mittal earlier said consolidation in the industry was inevitable and he did not see more than six companies surviving.
The sector has been witnessing low rates and declining revenues in the last two-three years. The average revenue per user as well as the profits of operators has taken a hit due to low rates, which started in late 2008.
Source: The Economic Times, Dec 27, 2011
NEW DELHI: The Telecom Commission has accepted industry regulator Trai’s recommendations to relax rules for mergers and acquisitions in the sector and allow spectrum-sharing among telcos, paving the way for consolidation in the 14-player market. 
The highest decision-making body of the communications ministry is also open to the regulator’s proposal to levy a one-time fee on operators for holding spectrum beyond 6.2 mega hertz, telecom secretary R Chandrasekhar said after a marathon meeting late on Monday. Mergers and acquisitions will get automatic clearance if the combined market share of the new entity is less than 35% and spectrum holding is less than 25%.
When the market cap is more than 35% but less than 60%, the Telecom Regulatory Authority of India will examine the case to avoid monopoly in the market, Chandrasekhar said. Trai had last month suggested that M&As be allowed in the industry if the combined market share of the new entity is less than 60%. The move will pave the way for consolidation in the industry, where a number of new entrants are yet to make a mark despite millions of Indians start using mobile phones every month.
While this is good news for telcos, it is estimated that they may have to shell out more than Rs 17,500 crore as one-time fee on excess spectrum, based on Trai’s recommendation of a fee of Rs 4,571.87 crore on each mega hertz beyond 6.2 MHz.
The commission favoured discovery of spectrum prices through auction for future allocation of airwaves.
It also fixed the annual revenue share at a uniform 8% for all telcos, against 6%-10% share depending on factors such as service and region. Chandrasekhar said this will be implemented in two phases over two years, but did not reveal details.
Telecom tower companies and internet service providers, who do not pay any annual licence fee now, too will now have to share 8% of their annual revenues.
Overall, the industry’s annual pay out to the government will increase by several thousand crores. The policy maker will finalise all other decisions within a week, Chandrasekhar said. The commission will send all these decisions to the Telecom Minister Kapil Sibal and subsequently it will see Cabinet’s node to implement them.
Source: Business standard, Dec 24, 2011
Mobile Apps revolution. Internet usage on mobile phones is growing at a scorching pace, giving rise to 
predictions that mobile internet usage will soon overtake desktop computers. It is estimated that the apps market in 2012 will be worth $17.5 bn. But what actually will make the apps market hot?
* Apps in local languages: In India downloading or buying mobile phone apps is still a new trend. One of the reasons is that most apps are developed for the English speaking audience. The year 2012 would see apps targeted at Indian consumers comfortable with their regional languages. So imagine Angry Birds in Malayalam or Quickoffice in Punjabi. Apps targeted at specific demographic profiles in their own languages could be a big trend in 2012.
* Localised apps: As the popularity of apps increases and with more and more people adapting to them, launch of niche apps seems to be just round the corner. If there is already an app for almost everything you can imagine, why can’t your kirana store owner launch his own app. For example, on your way home from office in the evening, you open your friendly kirana store’s app on your smart phone and select the grocery you want to purchase. As soon as you reach home the grocery is already waiting for you.
* Ecommerce on your mobile: We are witnessing a second innings of e-commerce in India, and there is also a quiet revolution taking place. The Indian consumer has matured and is no longer hesitant of shopping online. Till now PCs and laptops were used for browsing and looking for the best deals. But with information about most products readily available, most online purchase decisions are made quickly. What this means is that you don’t really need a 17 inch screen to complete an online purchase; you can do it on your mobile phone app.
Most ecommerce are companies have either launched or are working on their apps. 2012 will see e-commerce shift to the mobile phone.
* Media on mobile: Media houses want to reach out to their consumers in every possible way. First they sought out their consumers on the internet through websites. With the growing popularity of mobile phone apps, they are launching customised apps, which stream the latest news, updates and advertisements. While most leading media houses around the world have launched their mobile apps, 2012 will see more such apps, giving media houses access to both Indian and international target audience. Consumption of news and entertainment through mobile apps will see a sharp rise in 2012.
* Voice commands: Keying in commands on your mobile phone apps seems so last decade. With voice recognition technology becoming more advanced it’s only natural that apps in the near future will accept voice commands. When viewing photos slide show on the new social networking app, you just need to say ‘pause’ or ‘play’ to control the slide show.
With so much happening in this space, 2012 is going to be an exciting year. Many of us — the consumers and the producers — are keenly observing this dynamic market for signs that show that the mobile phones space will one day be as big and as important as the internet.
Source: Business standard, Dec 02, 2011
New Delhi: Top telecom honchos who met Prime Minister Manmohan Singh and finance minister Pranab Mukherjee, besides five other key economic policy makers in the government late yesterday, made a strong pitch for auctioning of 2G spectrum. They rejected an earlier formula suggested by a panel of the Telecom Regulatory Authority of India (Trai) that had linked it with the price reached at on the basis of 3G spectrum auction.
Source: The Economic Times, Aug 31, 2011
NEW DELHI: India will soon have a telecom security policy mandating that at least 50% of all ‘core telecom network equipment’ be indigenously developed or manufactured. The draft Telecom Security Policy, a copy of which was 
reviewed by ET, states that all network gearmakers and mobile phone operators will be ‘suitably engaged to achieve this objective’ of local manufacturing .
The proposed policy recommends radical changes aimed at securing the country’s mobile networks, which are the second largest in the world after China. For instance, it states that mobile phone companies will be permitted to induct both hardware and software only from ‘trusted sources’ , a list of which will be complied by the telecom department. The draft also adds that all core hardware required for the telecom network must be installed only on certification by a standard testing organisation irrespective of the origin of equipment . It also calls for periodic audit of the networks of all mobile phone companies by security agencies, government wings or reputed international agencies for bugs and other security breaches.
Importantly, the draft also states that a slew of new regulations will be enacted to ‘enable law enforcement agencies to legally track communications , messages and data on a realtime basis’ without transgressing on the privacy of citizens. “The effective systems, processes and regulations will be put in place to ensure the traceability of telecom users also in case of need. While best efforts will be made to extend the communication assistance for law enforcement to security agencies, it will be kept in view that privacy of individual is not transgressed without valid reasons, provided the law and development needs of the country are not hampered,” the draft policy adds.
The new policy may address the government’s concerns regarding 15 forms of communications, including Google’s Gmail, Research in Motion’s BlackBerry services, Nokia’s email offerings and Microsoft Skype amongst others, which cannot be tracked by enforcement agencies here on a real-time basis as the new framework may force operators who offer such services to either locate servers in the country or share encryption keys and assist security agencies in monitoring these services. The telecom department (DoT) had earlier maintained that the ultimate solution to address security issues should involve intelligence agencies building up capabilities indigenously to monitor and intercept these technologies.
It had also suggested that security agencies here avail the help of companies such as Infosys, TCS, Wipro and Tech Mahindra to build such capabilities. The new framework also moots for stricter norms for remote access (RA), or the provision to monitor data and voice traffic on cellular networks from remote locations across the globe and proposed that this facility be carried out only from within the country. The Cabinet cleared the external RA facility in March 2007 with a slew of riders .
Indeed, security concerns over RA delayed the FDI hike in telecom to 74% by a year. Under existing rules, operators should keep an audit trail of all remote access activities for six months, and these must be provided on request to DoT or any other agency authorised by the government. Besides, telecom companies must keep mirror images of such activities for online monitoring and provide the same to security agencies on request. Also, the provision of remote access cannot be used for monitoring content.
The DoT has already circulated the draft policy prepared by its security wing, headed by Ram Narain, to all its members who have been asked to submit their views by September 6. Justifying the need for a new framework , the communication ministry said that most sectors of the economy were dependent on exchange of information , which largely takes place through telecommunication infrastructure . “It is not simply an information infrastructure or even a critical information infrastructure, but has to be viewed as the most important critical infrastructure. Because of the dependence of other sectors on telecom infrastructure , it has become important even for the security of the society and the country,” the draft policy states.
Source: Business standard, Aug 25, 2011
New Delhi: In a move which should help consolidation in the telecom sector, the department of telecommunications (DoT) has asked the Telecom Regulatory Authority of India (Trai) to formulate details of an exit policy for service providers wishing to quit.
Some of the dozen-odd operators allotted a Unified Access Service licence by former telecom minister A Raja in 2008, when confronted with the steep competition, had decided to limit their services to certain areas or had dropped plans of launching these in other circles.
The Telecom Commission, the highest policy making body of DoT, has already approved the proposal for an exit policy, DoT said in an internal note dated August 18.
Trai would issue a consultation paper on the issue and give its recommendations after views from all stakeholders.
BACKGROUND
Under current licencing norms, there is no exit route for operators who’ve taken a UAS licence. Under the terms, a pan India operator has to pay Rs 1,650 crore for such a licence, but has no option to surrender it with the start-up spectrum of 4.4 Mhz and get the entry fee back from the government. Put another way, the government would keep the money if an operator quits. Nor is a refund given if an operator surrenders the spectrum following a merger with or acquisition of another company having spectrum in the same service area.
The contentious issue came into the open when Loop Telecom, one of the new operators, made an offer in the Supreme Court this year that it auction its licence, along with spectrum for 21 circles, and refund the money it had paid for these. And, earlier, too, when DoT had asked Idea Cellular to surrender six overlapping telecom licences, which it had got after its acquisition of B K Modi’s Spice Communications some years before. DoT said there was no question of returning the Rs 800 crore Idea had paid as the fee for the licence in these circles. The licences were for rolling out 2G services in Punjab, Karnataka, Andhra Pradesh, Delhi, Haryana and Maharashtra.
Many of the incumbent operators had also supported the move, as they argued this would help in freeing scarce spectrum, required by the others for their expansion and which was not available.
After Trai recommended cancelling 74 new licences due to failure in meeting rollout obligations, DoT has been exploring ways to offer some of the service providers a way out of the impasse, in which they could take advantage of an exit policy for failure to meet their roll out obligation, rather than face a stiff order for cancellation.
Some of the new players, including Videocon, Etisalat DB and Loop Mobile, have either not launched services or launched in selected circles. Many have also approached the government for an exit route. Norway’s Telenor, which acquired a majority stake in Unitech Wireless, has launched its services under the brand name of Uninor. Sistema Shyam has also rolled out CDMA-based mobile services.
ALSO FOR TRAI
DoT has also referred back some of the earlier recommendations of Trai on spectrum management and other licensing issues, which included norms on merger and acquisitions, pricing of excess 2G spectrum and other issues. After the report of an internal committee of DoT, which examined all the Trai recommendations, the Telecom Commission had met to take a final decision.
However, based on the report of an internal committee, which had not agreed on some of the points, coupled with differences in the Commission, it was decided the recommendations would be referred back.
Source: The Economic Times, Aug 24, 2011
NEW DELHI: The foreign direct investment in the telecom sector was Rs 5,434.48 crore during the quarter ended June 30, 2011, Parliament was informed on Wednesday.
The country has received a cumulative total of Rs 36,931 crore as FDI in telecom sector in the period from April 2008 to June 2011, Minister of State for Communications and IT Milind Deora told the Lok Sabha in a written reply.
For telecom services, FDI up to 49 per cent is permitted under automatic route and beyond 49 per cent and up to 74 per cent is through Foreign Investment Promotion Board (FIPB).
The country received FDI of Rs 11,684.81 crore during 2008-09, Rs 12,269.66 crore during 2009-10 and Rs 7,542.04 crore during 2010-11, respectively, Deora said.
Source: Business standard, Aug 23, 2011
New Delhi: The Department of Telecommunications (DoT) is working on a proposal to compensate government agencies from the Consolidated Fund of India for the vacation of spectrum that will be used for commercial purposes.
Defence forces, besides the ministries of space and information and broadcasting, are the main entities which use spectrum. The proposal may find its way into the New Telecom Policy-2011 that the department is drafting.
”The government agencies,” says an internal note from the department, “are the major users of the spectrum which is required for commercial use. The agencies may be suitably compensated from the Consolidated Fund of India to ensure vacation of spectrum through migration to other bands.”
The refarming of the spectrum needs to be done after the vacation to ensure the usage of the spectrum with advanced technology for various wireless services.
Since it will be difficult to estimate the amount of refarmed spectrum, the size of the fund also will be worked later, according to a senior DoT official. “This will be decided after the formulation of the policy. The required funds can be requested from the consolidated fund of India,” he told Business Standard.
Currently, there is no such mechanism of compensating the users of spectrum for vacation. The Cabinet approval was taken for setting the OFC network, after which the defence forces would move to a different band of spectrum.
The DoT had earlier asked for the vacation of additional 80 MHz from the defence services to meet the needs of telecom industry. The vacation of spectrum, it had said, may generate additional revenues of about Rs 80,000 crore on the basis of prices discovered through the spectrum auctioned last year.
Defence forces had already agreed to release 150 MHz of spectrum in 1,700-2,000 Mhz band. An additional spectrum of 80 MHz is also required, without which the growth of 2G and 3G services will be hampered, the department had said.
The telecom industry is already facing a spectrum scarcity. According to telecom regulator Trai, the total requirement of spectrum in the next five years would be around 500-800 MHz, including 275 MHz for voice services alone. On the other hand, the availability of spectrum is only to the tune of about 287 to 450 MHz.
State-run telecom major BSNL, on behalf of DoT, is setting up an optical fibre network (OFC) in lieu of the vacation of spectrum by defence services. The defence ministry has already vacated 15 MHz 3G spectrum, which was auctioned last year. It has also vacated 15 MHz 2G spectrum, which has been allocated to new operators.
The further release of spectrum will be done after various completion stages of the OFC network, which is estimated to cost over Rs 10,000 crore.
DoT is also in the process of formulating a new Spectrum Act, which will seek to give powers to the government to withdraw or cancel the unused spectrum assigned to the service providers.
The DoT has set up a committee to formulate a Spectrum Act. The formulation of the legislation came in the wake of controversies related to the allocation of spectrum to the new players in 2008 at a price fixed in 2001. This, according to the CAG, caused the exchequer a whopping loss of Rs 1.76 lakh-crore.
