Companies & Sectors
Cabinet clears Rs31,000 crore spectrum levy on mobile operators

While the price discovered in the auction beginning 12th November will apply for the one-time fee to be charged from incumbent GSM operators, the DoT will work out the basis for the same for CDMA carriers

New Delhi: The Cabinet on Thursday approved levy of about Rs31,000 crore as one-time fee on spectrum held by incumbent telecom operators such as Bharti Airtel and Vodafone in an attempt to create level playing field between old and new operators, reports PTI.
Finance Minister P Chidambaram said the Cabinet has approved the recommendation of an Empowered Group of Ministers (EGoM) that GSM-based telecom operators be asked to pay for airwaves they hold beyond 4.4 Mega-Hertz at an auction-determined price, while CDMA carriers pay for holdings beyond 2.5 MHz, for the remaining validity of their permits.
GSM-operators holding more than 6.2 MHz of spectrum will pay a retroactive fee for the airwaves from July 2008.
Chidambaram said while the price discovered in the auction beginning 12th November will apply for the one-time fee to be charged from incumbent GSM operators, the Department of Telecom (DoT) will work out the basis for the same for CDMA carriers.
This is because there is no bidder for CDMA auction now and so there will be no auction determined price, he said.
"Similar recommendations (of auction determined price being levied) were made for CDMA but there has been subsequent developments since the EGoM meeting that bidders who had evinced interest for CDMA auction have withdrawn from the auction. Therefore there is no auction now for the CDMA," he said.
"DoT has been requested to come back to the Cabinet regarding implementation of the decision regarding CDMA," he added. .
The government had planned to hold two separate auctions for spectrum used by GSM and CDMA-based mobile phone carriers hoping to reap a combined Rs40,000 crore revenue.
It has set a base price of Rs14,000 crore for 5 MHz of a pan-India GSM spectrum, more than seven times what companies paid in 2008 to get telecom licenses. For CDMA, the base price was set at 1.3 times the GSM airwaves.
However, no bidder is left in fray for CDMA auction after Tata Teleservices and Videocon Telecommunications withdrew from the sale.
Chidambaram said licensees "will be given an option to surrender spectrum beyond 4.4 MHz for GSM" if they don't want the one-time fee.
Also, payments can be made in equated annual instalments at 9.75% interest rate.
"The licensees will be allowed equated annual instalments for the balance number of years of license (such that the last instalment is payable not later than 12 calendar months prior to expiry of the license)," official statement said.

The Cabinet has also allowed sharing of spectrum, or radiowaves, among telecom operators who have paid for it beyond 4.4 MHz (GSM) as per the decision will be allowed.

"If two service providers are there and both have paid for spectrum 4.4 Mhz, then no charge. But both TSPs will have to pay spectrum usage charge at the slab rate applicable on entire combined spectrum holding," Telecom Minister Kapil Sibal said.

The Cabinet also decided on intra-service area merger. A company acquiring an operator, which was given spectrum at old rate of Rs1,658 crore, will have to pay for radiowaves that the target company holds as per the price determined through auction starting 12th November 12.

"If company which has got 4.4 (Mhz spectrum), not beyond 4.4 (Mhz spectrum), is going to be acquired and they got the licence based on entry fee, then in that case resultant merged entity will be required to pay to the government differential between entry fee and current auction determined price," Sibal said.

On the issue of allotment of initial spectrum to firms that have paid the requisite fee but have not been allotted spectrum so far, the Cabinet decided that the claim of such company for allotment of 4.4 MHz of spectrum will be considered after the completion of auction process, subject to availability of spectrum.

"This is only related to one case, Tata's. So after this (auction) process is completed the issue will be considered," Sibal said.

The decisions are expected to result in more efficient utilisation of the scarce natural resource, facilitating proliferation of telecom services in the country, he added.

On the issue of levying one-time spectrum fee, Sibal said, "On CDMA issue, we will come back to the Cabinet because there is auction discovered price now, but that does not mean that (they) will get away without paying the price."

He said the government will determine the basis on which that price is to be paid in the interim, before the auction takes place. The discovered price will then be paid and it will be adjusted in the auction determined price.


Lack of clarity in law to act against political hierarchy: CVC

Srikumar said the CVC can regulate its own procedure as per the Act but on taking action against the political hierarchy, or the higher echelons in the executive and taking up suo motu inquiries, it require more clarity in the law

New Delhi: The Central Vigilance Commission (CVC) has sought 'more clarity' in a legislation governing its mandate in probing complaints of corruption against politicians or civil servants, reports PTI.
Central Vigilance Commissioner R Srikumar also said there was no uniformity across the states on the issue of handing over complaints to the Central Bureau of Investigation (CBI) for probe in corruption cases.
"The Central Vigilance Commission can regulate its own procedure as per the CVC Act but on taking action against the political hierarchy, or the higher echelons in the executive and taking up suo motu inquiries, more clarity is required in law," he told PTI.
The CVC, which was set up in 1964, acts as a statutory body to check graft and advise central government on anti-graft related matters.
The anti-corruption watchdog functions through Central Vigilance Commission Act, 2003 which empowers the CVC to take action against central government officials in cases coming under Prevention of Corruption Act.
"There is no uniformity across the States for the CBI to take up cases; the State Government has the power to withdraw its consent and concurrence and this has often occurred in the past--Karnataka, the State where I served as DGP, being one such example," he said without elaborating.
It is pertinent to mention that the Madhya Pradesh government, through a Gazette notification, has recently barred CBI from probing IAS, IPS and Indian Forest Service officers of the state cadre working in the state on corruption and other criminal charges against them. .
Srikumar also wanted a road-map to be laid out to strengthen the existing mechanism to fight corruption.
"Everywhere there is talk of corruption. I mean, everywhere, everyone is seriously talking today about corruption and there is also talk on how to effectively tackle the menace of corruption.
"We also need to arrive at a consensus and lay down a road map for strengthening the existing institutions and meet the growing public expectations and demands for quickly nailing the corrupt without any fear or favour," he said.
Srikumar, a former IPS officer, said that besides legislative hurdles, the anti-corruption and investigating agencies were also facing manpower crunch.
He said the agencies were facing resource crunch, both in terms of skilled manpower and in terms of financial allocations, for introduction of technology and upgrading the skills of the investigators.
The Vigilance Commissioner said there was a need to address the difficulties in bringing about the necessary reforms that can win the confidence of the public to march ahead towards the stated objective of zero tolerance towards corruption.
"Agencies such as FBI, Scotland Yard, anti-corruption institutions in Hong Kong and Singapore are highly respected in their respective societies and have a lead role in fighting corruption--on the punitive and preventive side as well as to address proactive and predictive sides of corruption handling measures.
"Citizen participation in these countries is more organised and brings better results," he said, seeking greater participation from public to root out corruption.



Dayananda Kamath k

5 years ago

but shehan himself failed in doing his duty by postponing the election of all the constituency when rajiv gnadhi was killed instead of only the constituency from where rajiv gandhi is contesting that paved the way for congress to reemerge and destroy this economy by their indiginious laws.

nagesh kini

5 years ago

What is the 'clarity' the CVC is talking about?
Mr. Seshan could bulldoze his way through to kick in the much required electrol reforms. Except for a few hiccups, neither the government or the courts could come in his way and now the EC is going hammer and tong.
The CVC needs to be more proactive go the whole hog.
He needs to come out with what
exactly he means.
Surely the aam janata and opposition parties will bring in pressure to bear on the parliament - leaving them no choice.
Be bold and specific Mr.CVC.We don't want PJ Thomases there!

Wim Plast reports solid quarter; net profit jumps 33%

Wim Plast, a company that manufactures moulded furniture, reported steady sales and a 33% jump in net profit due to increased other income

Wim Plast, a consumer consumable company that manufactures moulded plastic chairs, has reported solid results for the quarter ended 30 September 2012. Wim Plast’s net sales were reported to be higher by 28% year on year (y-o-y) to Rs58.53 crore. Operating profit for the period between June 2012 and September 2012 grew 20% y-o-y to Rs9.92 crore while net profit jumped 33% to Rs6.89 crore. This was mainly helped by other income which was 340% higher y-o-y at Rs1.29 crore from Rs29.35 lakh.
Read more about other company results here.
This company isn’t tracked by many analysts. However, a closer look into its numbers revealed some interesting facts. For instance, our Moneylife database showed that it has never reported either declining net sales or declining operating profit in the last three years, showing that the company has been growing, albeit at a very steady rate in the last three years. Even though, for the latest quarter, both net sales and operating profit grew less than their respective three-quarter averages, it grew at double digits in a challenging economic environment. In fact, net profit grew at a much higher rate than both net sales and operating profit. Despite years of steady performance, its valuation remains cheap with its market capitalization quoting at over five times operating profit while its return on equity (ROE) remains impressive at 26%. 
Last year Wim Plast opted for a series of strategic expansion projects across the country where it setup three new manufacturing units at Chennai, Haridwar and Daman with added capacities and range of products. A total amount of Rs28.84 crore was invested in these projects. Another project, a manufacturing unit of plastic moulded furniture at Kolkata, is in process. Other than moulded furniture, it manufactures bubble guard and flute board sheets which have applications in packaging, advertising and construction. 
Wim Plast stock price at time of writing this piece stood at Rs380, up 38% since we recommended it.
Read more about Wim Plast here.


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