Companies & Sectors
Call drop penalty least invasive, TRAI tells SC
New Delhi : Telecom regulator TRAI on Thursday defended, in the Supreme Court, its decision to impose call drop penalty on the telecom service providers (TSP) describing it as a "least invasive way to deal with the issue".
 
Defending the Delhi High Court order upholding its call drop penalty order of October 16, 2015, the Telecom Regulatory Authority of India (TRAI) told an apex court bench of Justice Kurian Joseph and Justice Rohinton Fali Nariman that telecom service providers (TSP) must enhance their investment in infrastructure as they were earning huge revenues.
 
The high court's February 29 judgment had come as it dismissed the TSPs' plea for the stay of TRAI's compensation policy, under which a rupee would be credited to the mobile users' account for every call drop (restricted to three per day) starting January 1, 2016.
 
Assailing the contentions raised by the TSPs, Attorney General Mukul Rohatgi told the court that there was huge gulf between the revenue being earned by the TSPs and the investments being made by them on augmenting the infrastructure.
 
If between 2010 to 2014, the revenue of TSPs has increased by 48 percent, the investment in infrastructure in wireless access service segment rose by only 4.6 percent from Rs.2,02,399 crore in fiscal 2012-13 to Rs.2,11,691 crore in fiscal 2013-14, he said, adding that investment in telecom infrastructure in 2015 here was $5 billion where as in China it was $50 billion.
 
He noted that there was limited spectrum and it could not be that TSPs would go on adding to their subscriber base without making investments for improving the infrastructure. The attorney general quoted statistics showing that from 2010 to June 2015, the number of subscribers increased by 61.9 percent from 62.13 crore in 2010 to 100.6 crore in June 2015.
 
"You (TSPs) don't spend on highway (spectrum) and you will not spend on infrastructure and cry far minuscule issue of call drop charge," Rohatgi said meeting the contentions by the petitioner associations - Cellular Operators Association of India (COAI) and the Association of Unified Service Provider of India (USPAI) - which had challenged the TRAI notification.
 
Telling the court that penalty for call drop was least invasive way to deal with the call drop issue, he said that the government could have done much more, citing the case of China where 25 percent of revenue must be invested in infrastructure.
 
Rebutting the contention of the TSPs as to how could it be decided whether the call drop was network-related or user-related, Rohatgi said: "System has the capability, and that capability has been demonstrated and it can't be said that user-related call drop could not be separated from network-related call drop."
 
He placed before the court documents to demonstrate that different kinds of call drops are identified and recorded by the system.
 
Contesting the TSPs claim that it would be a financial burden on them, he said that the total number of call drops (outgoing) in the entire network was 800 crore in a year and if TSPs are made to compensate for all of them, then it would amount to Rs.800 crore per annum.
 
But after exempting the user related call drops, the amount of compensation would come to Rs. 512 crore, and get further shrunk after the capping the penalty to three calls a day, the court was told.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

Param

10 months ago

i understand the customer sensitive point of view, but i have one key question from business point of view:
when businesses bid for licenses, was there a restriction in terms of allowed call drops? if not, is this not akin to changing the rules of the game while the play is on? will govt allow bidders to revise the price including this new condition?

best a govt can do is publish facts with transparency & let people decide if they are getting value for money. switching today is so cheap & easy & MNP allows retaining the number as well.

Diageo contests tribunal order on exit deal with Mallya
Bengaluru : British liquor major Diageo plc on Thursday contested the Debt Recovery Tribunal's jurisdiction to attach the $75 million deal it signed with industrialist Vijay Mallya his exiting its Indian arm United Spirits Ltd (USL).
 
"The tribunal has no jurisdiction to attach the $75 million deal (Rs.515 crore) signed outside the country and its payment terms as part of the severance package," Diageo said in its objections filed against the tribunal's order, legal sources privy to the case told IANS after the hearing was adjourned to April 29.
 
Tribunal's presiding officer R. Benkanahalli on March 7 directed Diageo not to pay Mallya till it disposed of the State Bank of India's March 2 interlocutory application (IA) and ordered attachment of the deal amount.
 
Diageo, however, confirmed to IANS on March 9 that it had paid Mallya $40 million (Rs.275 crore) on February 25 as part of the package, with the balance $35 million to be paid in equal instalments over the next five years.
 
As part of the sweetheart deal, Mallya resigned as chairman and director of USL and agreed not to compete with Diageo in spirits business the world over for the next five years and not to interfere in its Indian arm's business matters.
 
Diageo also objected to the SBI's April 13 petition for tribunal's direction to deposit the $40 million it transferred to Mallya's bank account outside the country.
 
"The bank cannot ask a tribunal to order depositing the amount paid to Mallya outside the country. The balance amount payment in future is subject to Mallya fulfilling the deal's terms and it (payment) is not guaranteed if they (terms) are not met," it said
 
Though SBI rushed to the tribunal a day after the agreement on February 26 to advance hearing on its original application (OA) filed in June 2013 for recovery of loans it and 16 other state-run and private banks advanced to Mallya's now defunct Kingfisher Airlines between 2004-12, it was not "aware" of Diageo's part payment to the 60-year-old liquor baron.
 
As a lead bank of the consortium of 17 banks to which Kingfisher owes Rs.9,091.39 crore as combined loans with interest, the SBI filed four IAs before the tribunal on March 2 after CBI director Anil Sinha expressed concern over its delay in acting against Mallya.
 
Meanwhile Diageo also argued that since it was not a party to the SBI's OA against Mallya, Kingfisher and United Breweries Holding Company, it cannot be made party to the IA for attaching the latter's property or assets.
 
In a related development, SBI counsel sought time to get clarity from his client on attaching sale proceeds of Mallya's private jet through auction on May 12-13 by the service tax department, as ordered by the Bombay High Court.
 
The SBI had also earlier sought the amount from the sale of Mallya's aircraft by the department to recover a part of the Rs.1,600 crore it had advanced to Kingfisher.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Nifty, Sensex is a highly overbought zone – Thursday closing report
The market may give up some gains if Nifty closes below 7,874
 
We had mentioned in Wednesday’s closing report that Nifty, Sensex looked overbought and that Nifty looked ripe for a small reversal, if it closed below 7,856. The major indices in the Indian stock market closed flat over Wednesday’s close, as there was little new impetus. The trends of the major indices in the course of Thursday’s trading are given in the table below:
 
 
Key Indian benchmark indices were trading higher on Thursday following favourable Asian markets cues but the market indices closed flat by the end of the day, as there was lack of momentum in an overbought market. At the BSE, good buying was observed in banking, finance, and oil and gas sectors, while selling pressure was seen in telecom sector. The S&P BSE Bankex increased by 2.62%, finance index inched up by 1.82% and oil and gas index went up by 0.94%. However, telecom index dropped by 1.15%. Ahead of the start of trading session in India on Thursday, Asian markets moved up higher on account of a surge in global crude oil prices. Most benchmark indices in the Asia-Pacific region were ruling higher, even though the Shanghai Composite and Shenzhen Composite were shaky.
 
Global software major Wipro Ltd. on Wednesday projected higher revenue from its IT services business for the first quarter (April-June) of this fiscal (2016-17), while net profit dipped 2% in the fourth quarter (January-March) of last fiscal 2015-16 under global accounting norms. "We expect revenue from our IT services to be $1,901-1,939 million ($1,920 average) for first quarter (Q1), as we had 2.4% strong sequential growth ($1,882 million) in fourth quarter (Q4) of fiscal (FY 2016)," the company said in a statement. The company's net profit for quarter Q4, however, declined 2% annually and was flat (0.3%) sequentially at Rs2,240 crore. For fiscal 2015-16, the net profit marginally increased 3% YoY to Rs8,890 crore. Total revenue for the quarter under reference (Q4) increased 12% YoY and 5.9% quarterly to Rs13,630 crore and 9% YoY for fiscal 2016 to Rs51,240 crore. The company also announced buyback of 40 million equity shares of Rs2 face value at a price of Rs625 per equity share from its investors on a proportionate basis through a tender offer. The buyback payable in cash will cost the company Rs.2,500 crore. The quantum of shares (40 million) for buyback, however, represents only 1.62% of total equity capital. The firm's blue chip scrip closed at Rs601.35, which is Rs12.20 or 2.07% from Tuesday's closing price of Rs589.15 and opening price of Rs595 and the day's high of Rs606.75.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 

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