Any move to charge for spectrum beyond 4.4 MHz from new operators would send a wrong signal to the global investors as they have entered Indian market based on licence conditions and business models of incumbent players
New Delhi: In a move that will provide a huge advantage to old GSM operators and impact the valuation of new entrants in the telecom sector, spectrum allotment beyond 4.4 MHz will now be done through an auction, though older players were spared such additional charges till they had 6.2 MHz, reports PTI.
“Telecom commission has decided to charge new operators.
For additional spectrum beyond 4.4 MHz, telcos have to buy additional airwaves through auction,” according a person with direct knowledge of the matter.
Recently, new telecom operators such as Tatas, RCom (for foray into GSM services), Sistema-Shyam, Uninor and others have written a letter to telecom minister Kapil Sibal terming the proposal to charge new telcos for additional spectrum beyond 4.4 MHz as discriminatory, saying it will impact their sustainability and scalability.
Telecom Regulatory Authority of India (TRAI) has been mulling charging operators for additional 1.8 MHz (GSM)/2.5 MHz (CDMA) spectrum, beyond the start-up spectrum of 4.4 MHz/2.5 MHz respectively.
Any change to the already existing contractual arrangements with regard to allocation of additional 1.8 MHz/2.5 MHz will be highly discriminatory, against the level playing field and likely to derail business plans, the new operators had said.
Citing various Telecom Dispute Settlement and Appellate Tribunal (TDSAT) rulings and views of DoT and TRAI at various times, the operators said 6.2/5 MHz is considered the contractual minimum and the optimal quantity of spectrum for pan-India GSM operations.
The operators had said that such changes would be in violation of the present licence conditions.
Further, saying that any changes to the contract were not legally tenable, the operators have asked the government to re-consider the proposal and seek legal opinion on the same, before passing any final decision.
According to new players, they should be given more concessions in view of limited market as the old players have already cornered maximum spectrum as well as subscriber base.
Any move to charge for spectrum beyond 4.4 MHz from new operators would send a wrong signal to the global investors as they have entered Indian market based on licence conditions and business models of incumbent players.
Growth and inflation in the New Year will depend on several factors, including global developments, the flow of investment from overseas destinations and demand for goods in export and domestic markets
New Delhi: Combating the economic slowdown and arresting the rupee’s fall will remain the main priorities for the government and the Reserve Bank of India (RBI) in the New Year, though inflation, which remained a major problem throughout 2011, may cease to be an important issue in the months ahead, reports PTI.
As the economic woes, driven mainly by global factors, spill over to 2012, the government will also have to deal with the spectre of policy paralysis by promoting economic reforms and boosting the investor sentiment.
Although 2011 began on a positive note, with the economy recording a growth of 7.8% in the quarter ending March 2011 and the Economic Survey (February 2011) projecting an acceleration in growth to about 9% in 2011-12, the euphoria was short-lived.
The growth rate slipped to 7.7% in the quarter ending June 2011 and 6.9% during July-September from 8.8% and 8.4%, respectively, in the corresponding periods last fiscal. The figures for the October-December quarter are not yet out, but indications are that they would be no better.
Worried over slowing growth, a group of industry leaders, including HDFC chairman Deepak Parekh, wrote open letters to the government expressing concern over a “policy paralysis” and underlined the need for firm action to deal with the situation.
Their repeated outbursts, however, evoked a sharp reaction from prime minister Manmohan Singh, who blamed industry head honchos for spreading despondency by criticising the government.
“I must confess that it is a little disappointing to sometimes hear negative comments emanating from our business leadership or be told that the government’s policies are causing a slowdown and pessimism in the industrial sector.
Such comments have added to uncertainty and have emboldened those who have no stake in our economic growth,” Mr Singh had said.
However, the fact of the matter was that both the finance ministry and Reserve Bank of India (RBI) lowered the growth projection for the current fiscal to around 7.5% from 8.5 in 2010-11.
While the RBI had earlier projected a growth rate of 8%, the finance ministry in its Economic Survey had pegged growth at around 9%.
Industrial growth, as measured by the Index of Industrial Production (IIP), turned negative in October, experiencing a decline of over 5%. These signals do not augur well for economic growth in the coming months.
The finance ministry had attributed the slowdown to “global factors like the slowdown in the world economy, exacerbation of the Eurozone crisis, hardening of crude oil prices in the international market, as well as domestic factors such as the decision to battle inflation by tightening monetary policy and cutting back fiscal stimulus”.
With regard to the global factors, the sovereign debt crisis in Eurozone countries continues to pose a threat to the global recovery, which has been described by several experts as being in a fragile state. Problems are still there in countries like Greece, Portugal and Spain.
Despite the efforts of the G-20—a club of rich and poor nations—to contain the crisis, it has spilt over into 2012 and there will be no respite for global leaders grappling to find a workable solution to the sovereign debt problems of Eurozone nations.
The danger posed by the global crisis is significant, as highly indebted governments do not have sufficient resources to fund another bailout. They will have to focus on those confidence-building steps that do not involve the outflow of funds from government treasuries.
High crude and commodity prices in the international market also had a bearing on inflation, growth and the fiscal deficit.
Crude oil prices in the global market, which stood at about $89 a barrel in February, hardened in the following months to average around $106-$107. The crude prices remained stubbornly high despite the slowdown in the global economy.
For India, which depends on imported crude to meet 80% of its requirement, this was not a good sign. The oil marketing companies (OMCs) and the government had to raise retail prices of petroleum products in the domestic market.
OMCs increased petrol prices several times during the year, though sometimes it was lowered.
In addition to causing hardship to the common man and fuelling inflation, the rising prices of crude oil also impacted the fiscal deficit. Finance minister Pranab Mukherjee recently told Parliament that the central government’s subsidy bill for 2011-12 will rise by over Rs1 lakh crore above the Rs1.34 lakh crore provided for major subsidies like fertiliser, food and petroleum products in the Budget.
An increased subsidy bill will have implications on the fiscal deficit, which is high in comparison to the previous financial year. The government had planned to bring down the fiscal deficit to 4.6% of the GDP during 2011-12 from 4.7% a year ago, but the task seems impossible now.
A related issue that kept the government on its toes throughout 2011 was inflation. While food inflation has moderated on the back of declining vegetable prices, headline inflation continues to be a matter of concern.
Food inflation was as high as 16%-17% per cent in January and remained at elevated levels throughout the year. However, much to the comfort of the people as well as the government, it declined sharply to less than 2% in December, mainly on account of a moderation in prices of essential food items like potatoes, onions and other agriculture produce.
Headline inflation, however, continues to remain a matter of concern.
Headline inflation has remained above 9% and close to the double-digit mark throughout the year. In November, overall inflation was recorded at 9.11%. The figures for December, to be available in January, may show a decline.
In view of the declining trend noticed toward the close of 2011, inflation is likely to moderate in the New Year and may dip to 6%-7% by March-end, as has been projected by the finance ministry and RBI.
However, downside risks will remain and efforts would have to be made increase the supply of protein-based products like milk, fish and eggs.
The moderation in inflation, besides other factors, can also be partly attributed to the tight monetary policy followed by the RBI during 2011. In fact, the central bank, which began hiking the repo rate—at which commercial banks borrow funds from the RBI—in March 2010 maintained the monetary stance throughout the year.
The repo rates were raised several times during the year in a bid to contain inflation and inflationary expectations.
The RBI sacrificed growth to check price rise, arguing that it was more worried about maintaining the medium-term growth momentum.
However, toward the close of 2011, the RBI made it clear that it would not resort to further increases of key interest rates and might even reduce them, depending on the price situation.
As inflation is on the decline and may further slip to 6%-7% by March-end, it is likely that the RBI would start reducing the repo rate in 2012. The first policy review in 2012 is due on 24th January.
Besides other things, the year was marked by sharp depreciation of the rupee, which fell to historic lows against the US dollar. The main reason for the sudden decline in rupee value was the withdrawal of funds by Foreign Institutional Investors (FIIs).
Having declined by over 17% since July, the rupee witnessed a low of over Rs54 per dollar in December, making it the worst-performing Asian currency during the year.
Growth and inflation in the New Year will depend on several factors, including global developments, the flow of investment from overseas destinations and demand for goods in export and domestic markets.
Currently, SEBI rules require media companies to disclose their interests or shareholding in listed companies while writing on them. Similarly, publicly traded firms are required to disclose details about their relationships with media companies
Chennai: Securities and Exchange Board of India (SEBI) chairman UK Sinha has said the media should exercise more ‘self regulation’ when it comes to writing about the stock market, reports PTI.
The market regulator plans to have interactions with media personnel in the coming months to make them aware about the “dos and don’ts” when reporting on the capital market.
“SEBI will have a series of interactions with media personnel on the dos and don’ts in the industry. They should exchange notes (with SEBI) on what is happening in the industry and how to educate people. There is a need to educate the public,” Mr Sinha told PTI.
Currently, SEBI rules require media companies to disclose their interests or shareholding in listed companies while writing on them. Similarly, publicly traded firms are required to disclose details about their relationships with media companies.
Way back in 2007, then SEBI chairman M Damodaran had mooted the idea of a self regulatory organisation for print and the electronic media, among others.
In August, 2010, SEBI made it mandatory for media groups to disclose details about private treaties for a stake in listed companies in lieu of promoting their brands.
The regulator had also made it compulsory for media houses to disclose in news reports their stakes in companies being written about.
"There are prescribed norms of journalistic conduct that require journalists to disclose any interest that they may have in the company about which they are reporting,” SEBI had said in August 2010.
“... However, there are no equivalent requirements in the case of media companies holding a stake in the company which is being reported or covered,” it had said.
“Therefore, SEBI took up the issue with the Press Council of India, expressing its concerns on the practice of many media groups entering into agreements, such as ‘private treaties’, with companies,” it had said in a statement.