Dot issues notices for termination of 85 new licences

While the Department of Telecom has issued show-cause notices to 13 companies for termination of the 85 new licences issued in 2008 who are "ineligible" for getting them, the telecom ministry has again rejected the allegation of any notional loss due to issuance of 122 new licences in 2008

New Delhi: The telecom ministry has informed the Public Accounts Committee (PAC) that it has issued show cause notices to 13 companies for termination of their licences, who are stated to be "ineligible" for getting them.

Based on the report of the CAG, the Department of Telecom (DoT) has "issued show-cause notices to 13 companies for termination of the 85 new licences issued in 2008. The companies have given their replies which are under examination," DoT said in its reply to PAC's questionnaire.

But, the ministry again rejected the allegation of any notional loss due to issuance of 122 new licences in 2008 and said the premium placed on the scarce resource from the perspective of a producer need not necessarily translate into a loss when seen from the view point of the consumer and public welfare.

"The concept of notional loss when spectrum is given at a price discovered few years earlier has to be balanced with the gains accruing to the consumers and the general improvement in public welfare in the form of faster economic growth," the DoT said.

The PAC, headed by BJP leader Murli Manohar Joshi, had sent 40 questions to the DoT relating to 2G spectrum scam.

Suggesting that notional loss reported by the audit report should be seen in light of benefit that it has gone to consumers and for public welfare in large in form of quick economic growth.

The DoT said the objectives of the Telecom Policy since 1999 is to increase tele-density and affordability for consumers, while maintaining a level playing field between incumbents and new players as well as revenue accrual for the government.

The Department pointed out that Telecom Regulatory Authority of India (TRAI) has also not recommended any methodology for auctioning second generation (2G) spectrum in its report of 2005, 2007 and 2010 related to telecom licences and spectrum allocation.

"Theoretical exercises based on economic modelling are fraught with simplifying assumptions that make the valuations unreliable, and no methodology can therefore be suggested by the Department in this regard," it said.

DoT pointed out that the CAG has not considered recommendation of TRAI made that spectrum in the 800, 900 and 1800 MHz band (presently used as 2G spectrum) should not be subject to auction.

Spectrum in 800 and 900 Mhz bands shall however be subject to auction as and when it is reframed for 3G and future technologies.


Entertainment business in India needs transparent, process controlled culture for big investments, says panellist at FICCI FRAMES

Only 2% of films in India are able to garner 100% of their investment, while 98% of the movies flop. There are a number of people who want to invest in the business, but they are often turned off because of the lack of transparency and uncontrolled process costs in the industry

The Indian media and entertainment (M&E) industry is expected to grow at a compound annual growth rate (CAGR) of 14% to $28 billion by 2015, but investors are staying away from the sector due to lack of transparency and uncontrolled process costs, according to a financial advisor to the global entertainment industry.

"There are lot of opportunities in the Indian M&E industry, but due to bad scripts, bad-budgeting and bad production prices, the potential of the country's entertainment business remains untapped and investors lose an opportunity," said Jane Gordon, chief executive, Moneypenny. Established in 1980, Moneypenny is a group of companies, which provides specialist financial services to the global entertainment industry. Ms Gordon was among the panellists at FICCI FRAMES 2011.

She said, India could follow co-production and co-financing model similar to that of Europe. Co-production had reached a stage of maturity in Canada, Australia and Europe, which allows entertainment industry players to successfully piece together finance for their projects, Mr Gordon added.

Calling for transparency in reporting profitability of film ventures, Bobby Bedi, managing director, Kaleidoscope Entertainment, said the fiction (about profit numbers) created by filmmakers puts off real investors.

Mr Bedi, who has used funding for his films, said that earlier financers and a few corporates funded the entertainment sector, but the industry blew the money. While there was a good amount of money being invested in movies, the industry became greedy, out-priced itself and as a result the industry became sick, he said.

Describing 2010 as a challenging year for the industry, a FICCI KPMG report, has said that with better content, an increase in multiplexes, investment in research and continued cost correction, the industry is estimated to grow to Rs132 billion by 2015 from Rs83 billion at present.

The Indian film industry, which is multi-lingual, is the largest in the world in terms of ticket sales and the number of films produced. The industry is supported by a vast film-going public and Indian films have also been gaining in popularity in the rest of the world-notably in countries with a large number of expatriate Indians.

Each year, India produces over 1,000 movies in various languages. At the end of 2010, it was reported that in terms of annual film output, India ranks first, followed by the US (Hollywood) and China. In 2009, India produced a total of 2,961 films on celluloid with a staggering figure of 1,288 feature films, including 235 Hindi movies. Yet, only 2% of the films are able to garner 100% of their investment, while 98% of the movies flop.

Nirvaer Sidhu, vice-president for media and entertainment, GoldmanSachs India, said film producers today were looking at markets outside the classical mould, and foreign companies and studios were eyeing India with great interest. Investors, he said, were looking at mitigation of risks, for alignment of interests with project promoters, simpler business models and desired intermediaries to manage the interests of producers and studios.

Underlining the need to create an ecosystem similar to that of Silicon Valley and ways to attract investments from high networth individuals (HNIs), Ranu Vohra, managing director and chief executive, Avendus Capital Private Ltd, said, the entertainment industry is a high-risk, high-return business. This industry requires funding from corporations that have made it big and such an investment culture would spawn disruptive innovation, which would, in turn, throw up new funding models, like investment from family offices and slate financing.

Slate financing is an investment in a film portfolio, rather than a single film, in order to spread out the risk that comes in placing all the eggs in a single basket.


The next 100-day agenda for Prithviraj Chavan, the CM of Maharashtra (Part III)

The focus must be on Mumbai, to conserve energy through better design of buildings; address congestion and mobility with better footpaths, cycle-ways and implementing the bus rapid transit system; and work on convenient low-cost housing mainly for slum dwellers who constitute the majority of the population

One of the recent chief ministers of Maharashtra, while in office, is reported to have stated that there is nothing in Maharashtra to speak of without Mumbai. That is a sad commentary for a state which has been in the forefront of economic development and social reforms, looking after the welfare of its people over the years. That the rest of Maharashtra could not keep pace with the growth of its capital is perhaps because of the prices of land appreciating by leaps and bounds, relative to not only the other parts of the state, but also with respect to the suburban areas of the capital city itself, and in this, the government in the post-liberalisation era felt it was the best thing that could happen to reflect "India Shining".

Privatisation and globalisation were given more importance than the delivery of services and providing amenities to inhabitants of Mumbai. Non-availability of affordable housing within proximity of the work place and inadequate public transport, has led to undesirable growth of informal housing to an extent that nearly two-third of Mumbai's population live in 'slums'. Perhaps, issues of water supply, sewage disposal and power supply could be tackled to a certain extent, but housing and transport govern the quality of life of the Mumbai citizen. Added to this is the shortage of open public spaces and what came within this domain was thrown away to private parties, silently, by modifying the Development Control Rules in the aftermath of the closure of textile mills in Mumbai.

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Let us see what all we can ask the chief minister to prioritise over the next 100 days. Let us confine ourselves mainly to housing, transport and power.

I will not dwell on generation of power to meet the demand. I am going to say that we must consume less power than we are doing now. In which case, what is the role that the chief minister will have to play in this matter? With so much building activity imminent in Mumbai, the time has come to ensure that buildings are designed for natural lighting and ventilation as they used to be, in the days when before electricity was commercially generated and distributed. Day time consumption of excessive power in non-industrial urban areas must be penalised severely, thus making power available in industrial and agricultural sectors in the state, eliminating the load shedding in the rest of the state.

Recycling water should be mandatory in Mumbai, which will provide for flushing and gardening and also watering of playgrounds and roads to lower the dust levels in the city. Noise levels in the city are high primarily because of movement of traffic, not just due to honking vehicles. Noise from traffic movement can be tackled by reducing usage of motorised vehicles on the road, besides use of more silent engines, which also helps in reduced dust levels. As regards honking vehicles, devices can be made that can penalise excessive honking by vehicles. Tackling this problem automatically reduces the need to have closed habitable space.

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How does one reduce the use of personal motorised vehicles? Given the fact that 44% of Mumbai's inhabitants walk to work, 3.1% cycle to work, 23% use the suburban railway and 17% use buses, we ought to provide good, adequate footpaths and cycle-ways (given that cyclists outnumber motorists), and implement the Bus Rapid Transit System. (BRTS) This would address the problem of congestion and mobility also.

While the items of (i) making buildings environmentally friendly and (ii) promoting walking, cycling and BRTS appear to be long term, their implementation begins now. In fact BRTS can be completed in near about one-fifth the time Metro Rail is estimated to take. Since huge investments are being made, all infrastructure projects must be designed not only to perform in disasters, but to be helpful in managing disaster situations. The chief minister cannot ignore this for reasons of cost, for human lives cannot be monetized. From this point of view, BRTS is a necessary corollary, and so is getting the Konkan Railway's Skybus off the ground.

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Since MMRDA has already taken up the building of rental housing on a large scale in the distant suburbs, the repercussion will be on continuation of slums if there is no safe and efficient public transport. Even with such a transport system in place, housing in far away places means travelling long distances and consequently high energy consumption, which is what we must try to avoid. The chief minister must look at alternatives to house slum dwellers in the same locality, but with better housing facilities, like re-introduction of the chawl system with good sanitation and natural lighting and ventilation and proper maintenance. After all, only about 8% to 10 % of Mumbai's land is occupied by 60% of the population which lives in slums. This cost can be met by the state government jointly with slum dwellers and housing finance institutions.

All other ongoing mega projects need not be stopped. But in case of a financial crunch, they should be given lower priority. Projects that have not begun, need not be started if they have little delivery value.

In summary, Prithviraj Chavan must give priority to the following issues in the next 100 days:
1) Discard the Surbana Consultant's "Concept Plan for MMR for 2052" and initiate planning of a people-oriented, culturally and financially vibrant megapolis of Mumbai, not forgetting that this megapolis is an integral part of Maharashtra and the country.

2) Get internet based, transparent Road Maintenance and Management System initiated and incorporated.

3) Get the Unified Mumbai Metropolitan Transport Authority (UMMTA) reactivated so that all infrastructure projects can get executed with proper co-ordination.

4) Set up all mechanisms to ensure that all projects get executed in compliance with the CRZ Notification 2011 and information be made available in the public domain.

5) Make it mandatory for new buildings to be designed in an energy-efficient manner-providing natural lighting and ventilation in habitable premises, as much as possible, and proactively penalise excessive use of power during day time in these premises.

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6) Make water recycling mandatory, to make water available for flushing, gardening, street washing and ground watering, reducing dust levels in the city.

7) Promote carbon neutral modes of mobility like walking and cycling, by providing infrastructure for them and implementing BRTS projects, thus addressing the mobility issue instead of increasing the number of personal vehicles. Reducing the usage of personal vehicles, thus lowering dust, air and noise pollution.

8) Incorporation of schemes in all infrastructure projects that would assist in (i) mitigation and (ii) management of disaster situations.

9) Converting all slums into "chawls" for housing and accommodating non-polluting existing cottage industries in the existing locations.

10) Stop all proposed projects that are yet to take off, if they do not fall in these priority categories. Those projects that have already commenced may be discretely suspended or converted to one of the above categories.

Although it was thought that specific projects could be listed and the status mentioned in this concluding part, it was felt that this could have turned into a status review rather than an agenda for the chief minister for the next 100 days.

While the chief minister should put these on priority, the setting up of an internal mechanism to monitor and transparently place this in the public domain is as important as executing the programme. I look forward to the changes taking place within the next one year, if the chief minister will take this up with proper understanding and vigor.

(Sudhir Badami is a civil engineer and transportation analyst. He is on the Government of Maharashtra's Steering Committee on Bus Rapid Transit System (BRTS) for Mumbai and the Mumbai Metropolitan Region Development Authority's (MMRDA) technical advisory committee on BRTS for Mumbai. He is also member of the Research & MIS Committee of Unified Mumbai Metropolitan Transport Authority (UMMTA). He was a member of the Bombay High Court-appointed erstwhile Road Monitoring Committee (2006-07). He has been an active campaigner against noise pollution for over a decade and he is a strong believer in functioning democracy. He can be contacted on email at [email protected])


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