Companies & Sectors
Consider extending deadline for telecos to operate: Government to SC

The DoT asked the apex court to consider allowing it to grant “temporary licences” to such operators till the completion of the fresh bidding process
 

New Delhi: The Centre on asked the Supreme Court to consider allowing the telecom operators, whose 2G licences were cancelled last year, to continue to operate after the 18th January deadline with a condition that they “will be liable to pay” for the spectrum as per the proposed price of the upcoming auction scheduled on 11th March, reports PTI.

 

The Department of Telecom (DoT) appraised its stand in an affidavit which assumes importance as the court had permitted the telecom operators to continue to operate till 18th January this year.

 

The DoT asked the apex court to consider allowing it to grant “temporary licences” to such operators till the completion of the fresh bidding process.

 

It said this plea could be taken into account if the court decides not to extend any further the 18th January deadline as “such an arrangement will avoid disruption of services to the subscribers on one hand and safeguard the public revenue on the other”.

 

As per the apex court order, 21 licences of Sistema Shyam Teleservices (MTS), 16 permits of Telenor controlled Uninor, 15 of Videocon and 3 CDMA permits of Tata Teleservices will stand cancelled from 18th January leading to disconnection of around 25 crore subscribers in the country.

 

Telenor is in the process to transferring the business of Uninor in six circles under new entity Telewings Communications, which recently won spectrum.

 

The affidavit said, “In case the court does not extend the period entitling the existing operators whose licences stand quashed to continue to operate beyond 18th January and in case such existing operators approach the government expressing their desire to continue to operate their services on such terms as the government may deem necessary... may consider issuing temporary licences to such operators till commencement of operations by successful bidders in the proposed auction.

 

“...and subject to further condition that they will be liable to pay the price discovered for such spectrum in the proposed auction or the reserved price, whichever is higher, with effect from 19 December 2012.”

 

The apex court had on 27th November last year said that the telecom operators, whose licences were cancelled by it but continued to operate due to delay on government's part to hold fresh auction of 2G spectrum, might have to pay for using the radio waves on the basis of current price.

 

“These existing operators have been permitted by the order of this court to operate till 18 January 2013.

 

“In the event that this court is inclined to continue to permit these existing operators to offer services till the commencement of operation by the successful bidders in the proposed auction, the Government respectfully suggest that this court may impose a condition that such operators will be liable to pay for the spectrum allotted to them, the price discovered for such spectrum in the proposed auction or the reserved price, whichever is higher, with effect from 19th December 2012,” the affidavit said.

 

The apex court had on 2nd February 2012, quashed 122 2G licences while allowing the telecom operators to run their services for four months after which the order was to become operative.

 

The date expired on 2nd May but the apex court allowed the operators to continue providing services as the Centre failed to put the spectrum on auction which was done only on 12 November 2012.

 

In the affidavit, filed by telecom secretary R Chandrashekhar, the DoT said that they are committed to ensure that the auction is conducted “fairly and impartially”.

 

“The Government of India is committed to ensuring that such auction is conducted fairly and impartially and in a manner that all eligible persons can participate in the auction in keeping with the principles enunciated by this court in its judgement dated 2 February 2012.

 

“It is respectfully stated that existing operators whose licences stand quashed may or may not evince interest in such an auction if they are not allowed to offer their services pending conduct of such an auction and this may impact the discovery of an optimal price for spectrum,” it said.

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Kotak sees oil under-recoveries rising to Rs1.3 trillion in FY14

The under-recoveries could decline to Rs0.8 trillion if diesel prices are increased at Re1 per litre every month as being proposed, Kotak Institutional Equities said

Mumbai: Brokerage firm Kotak Institutional Equities revised its estimates of under-recoveries on diesel, kerosene and LPG to Rs1.3 trillion for FY14 against Re1 trillion amid firmness in international oil prices, weaker exchange rate and the government failing to increase diesel prices, reports PTI.

 

However, the under-recoveries could decline to Rs0.8 trillion if diesel prices are increased at Re1 per litre every month as being proposed, it said.

 

“We have increased our estimate of gross under-recoveries on diesel, kerosene and LPG to Rs1.3 trillion for FY14 versus our previous estimate of Rs1 trillion, assuming higher crude oil prices, weaker exchange rates and no further increase in retail prices of regulated fuels,” senior executive director of the firm Sanjeev Prasad said in a note.

 

The firm has assumed an increase of $5 per barrel to $105 and exchange rate at Rs54 against the US dollar to arrive at the estimated increase in under-recoveries for FY14, it said.

 

“However, if we were to assume a monthly increase of Re1 per litre in retail price of diesel for FY14 along with roll-back of cap on LPG cylinders to nine, the under-recoveries will decline meaningfully to Rs0.8 trillion,” he said.

 

The petroleum ministry is considering a gradual increase in diesel prices of less than Re1 per litre on a monthly basis over the next 15 months in a bid to eventually deregulate retail prices, based on the recommendations of Kelkar committee.

 

Progressive increase in diesel prices, if implemented, may lead to meaningful savings on fuel subsidies. “We compute annualised savings of Rs90 billion on diesel subsidies for every Re1 per litre net increase in diesel price for oil marketing companies,” he said.

 

However, the report said it was doubtful if the government would be able to continue monthly price increases in the second half of the fiscal given that there are many state elections during January-March and the general elections in 2014.

 

The report further said higher market-linked prices of diesel for the direct bulk consumers will be relatively easier to implement and may reduce the subsidies meaningfully.

 

“Nearly 18% of diesel is consumed by bulk customers including the Railways, state transport undertakings and private industrial companies, who do not deserve any subsidy, in our view,” Prasad said.

 

The government's plans to increase cap on subsidised LPG cylinders to nine per household per annum from current limit of six can be managed through a price hike.

 

“We expect the annual savings on LPG subsidies to reduce to 9% assuming the proposed cap of nine cylinders per household per annum versus 28% assuming current cap of six,” he added.

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Unquoted: Yuvraaj Hygiene

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