Companies & Sectors
Govt clarifies norms for multi-brand retail stores

“The front-end stores set up by Multi-brand retail trading (MBRT) entity will have to be 'company owned and company operated' only,” the DIPP said adding the wholesale/cash & carry trading cannot be considered as having provided back-end infrastructure

The government clarified on Thursday that the multi-brand retail store set up by a global retail entity will have to be “company owned and company operated” and not operated by any franchisee.


The Department of Industrial Policy and Promotion (DIPP) said this in a clarification on queries of prospective investors/stakeholders on foreign direct investment (FDI) policy for multi-brand retail trading.


The DIPP also said the 30% sourcing rider will be considered fulfilled only if it is implemented for front-end stores.


It said that multi-brand retailing entity cannot engage in any other form of distribution and the entire investment in back-end infrastructure has to be additional.


The mere acquisition of supply chain or back end asset from an existing company would not be counted towards the mandatory back end investment requirement.


“The entity can invest only in greenfield (new) assets and it will not be possible to acquire supply/chain/back end assets,” it said.


It also clarified that the multi brand retail trading (MBRT) entity is not envisaged to undertake wholesale activity i.e. B2B.


“The front-end stores set up by Multi-brand retail trading (MBRT) entity will have to be 'company owned and company operated' only," it said adding the wholesale/cash & carry trading cannot be considered as having provided back-end infrastructure.


“FDI in MBRT will require fresh investment in back-end infrastructure,” it added.


The investment towards back-end infrastructure can be made across all states irrespective of whether FDI in MBRT is allowed in that state or not.


It further said that investments in multiple infrastructure companies would not be counted towards fulfilment of condition of mandatorily investing 50% in the back end infrastructure.


On the issue of allowing online sales to enable the company to better serve Indian customers, the DIPP clearly said that “multi-brand retail trading by way of e-commerce is not permitted”.


A query was also raised on whether the minimum investment of $100 million can be used to acquire existing retail stores or setting up new retail stores or a combination of both.


The DIPP said that 50% of the investments brought in, “must be” invested in back-end infrastructure and any amount spent in acquiring front-end retail stores would not be counted towards the mandatory back-end infrastructure funding.


“The front-end retail stores must also be set up as an additionality and not through acquisition of existing stores,” it added.


Several global retailers including Tesco and Wal-Mart had sought these clarifications.


Kingfisher employees on indefinite hunger strike for payment of salaries

As many as 60-70 employees are currently on an indefinite hunger strike at the Kingfisher House near the domestic airport in Mumbai

A section of the employees of the grounded Kingfisher Airlines on Thursday sat on a hunger strike at the Kingfisher House in Mumbai, demanding immediate payment of salaries, which have been pending since last August.


“As many as 60-70 employees are currently on an indefinite hunger strike at the Kingfisher House near the domestic airport,” a source said late yesterday evening.


The airline spokesperson could not be reached for comment.


Kingfisher Airlines’ CEO Sanjay Agarwal was also at the airline’s headquarters trying to persuade the employees to end the agitation, sources said.


The airline, which has not paid its employees since last August, has been grounded since October. Since December it has lost its flying licence too.


Though chairman Vijay Mallya has been promising relaunch since February, nothing has happened so far.


The 17 lenders to the airline, which owes them nearly Rs7,500 in principal, excluding arrears since January 2012, have sold sureties and shares of the airline as well as group companies worth around Rs1,000 crore so far as part of their recovery process.


Mukesh Ambani talks big about Reliance Jio, but no launch date

It has been three years since RIL returned to telecom with a big bang. Today, while outlining big plans for Reliance Jio, Mukesh Ambani yet again refrained from announcing a launch date for the 4G broadband service

It is no secret that Mukesh Ambani, chairman and managing director (CMD) of Reliance Industries (RIL), has big ambitions in telecom sector. This was reflected in his speech at the annual general meeting (AGM) of RIL on Thursday. As expected, he informed shareholders about his big plans for his Reliance Jio (RJio), the 4G venture. However, this time also he did not mention any launch date for the fourth generation service.


“Our vision for India is that broadband and digital services will no longer be a luxury item—a scarce commodity—to be rationed amongst the privileged few. Together with our partners, we have charted an ambitious plan for the next 12 months, and we at Reliance Jio foresee making rapid progress over this period towards launching our services across India," Ambani, the richest man in India said.


However, instead of announcing the impending launch date for RJio, he merely said, “Our impatience to reach our goal demands a sense of urgency, but not careless haste.”


Reliance Jio Infocomm is the only company to have nationwide permits for 4G broadband services. According to the RIL CMD, as of today, RJio has increased its headcount to over 3,000 professionals from 700 a year ago and expects to ramp up the number to nearly 10,000 over next year.


Over past few months, RJio has signed agreements with Anil Ambani's Reliance Communications (RCom) for using its inter-city fibre optic network and with Bharti Airtel for use the telecom services provider’s submarine cable that connects India and Singapore.


As per the agreement, RJio would use RCom’s multiple fibre pairs spread over 1.2 lakh km across the country for providing backbone to roll out its 4G services. “RCom will in turn have reciprocal access to optic fibre infrastructure to be built by RJio in the future,” RCom had said in a release. RJio agreed to pay about Rs1,200 crore to RCom as one time indefeasible right to use (IRU) fees for sharing the fibre optic network.


Similarly, RJio would use the dedicated fibre pair on i2i, the submarine cable owned by Bharti Airtel. It will connect RJio directly to the world’s major business hubs and ISPs, thereby, helping the operator to meet the bandwidth demand and provide ultra-fast data experience to its customers.


Telecom has always been a sector close to the heart of the Mukesh Ambani, who is known for his quick execution of mega projects, launched his ‘dream’ mobile services in 2003-04 with a slogan “Kar Lo Duniya Muththi Mein” (take control of the world). However, he had to give up Reliance Infocomm (which later became RCom) to Anil Ambani in 2005 when the Reliance empire was split.


Later in 2010, Mukesh Ambani-led RIL re-entered the telecom arena with a bang, announcing the acquisition of Infotel Broadband Services Pvt Ltd, which had emerged as the sole winner of pan-India broadband spectrum, for Rs4,800 crore.


According to the RIL CMD his 4G telecom services would be pillared on “affordability and providing an unparalleled range of services that do not exist today.”


“In the coming years RJio’s next generation digital infra and services platform will catalyse a transformation and will embrace almost every facet of India’s economic growth and social progress,” he said at the AGM.



Ankur Bhatnagar

3 years ago

Can you find out which version of 4G will Reliance offer? I am asking this because the version that Airtel offers is incompatible with almost all 4G phones, including iPhone, Samsung, etc. The version that Airtel offers is used only in India and in some parts of China. It uses LTE-TDM standard. I believe Reliance is also going for the same standard.

You may consider investigating why this is so. It is important because lakhs of customers will discover with a rude shock that their expensive phones won't give them 4G performance when used with Airtel and Reliance. I would say that Airtel and Reliance (if this is true with them too) should not be allowed to market their service as 4G because it will create confusion in the market.


Deepak Gupta

In Reply to Ankur Bhatnagar 3 years ago

Its not only a standards difference. The frequency bands are also different. This is a problem with LTE all over the world with too many different bands. But, both Qualcomm and Intel are working on global LTE chipsets and radios.

And, BTW: Reliance Jio's license is for broadband wireless, not a phone service. The spectrum was sold for broadband wireless only. Later, the govt has permitted ISPs to offer voice as well, allowing Jio an entry into mobile telephony as long as they pay for a universal license.

Ankur Bhatnagar

In Reply to Deepak Gupta 3 years ago

Well, in the mean time then these companies should not be allowed to label their services as "4G" as that would mislead the customers.

Secondly, just why we only in India are going in a direction different from the rest of the world? When iPhone (and nearly all 4G phones) can work on 4G everywhere else, why should we have different standards and bands here? There is something seriously wrong about the competence in Indian companies and government decision makers.

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