Companies & Sectors
Muted response seen for India's 'largest' telecom spectrum auction
The base price and the quantum of airwaves on offer make the next round of spectrum auctions the largest ever. But the high reserve price, notably for the 700 MHz band, and time still for the expiry of existing holdings could make the response muted, analysts warn.
The views of six top brokerages and consultancies is that service providers will cherry-pick the bands they need, putting a question mark over how much of the 2,354.55 MHz on offer across seven bands will be sought and what quantum of the $84 billion reserve price be realised.
"Since no spectrum is up for renewal for any of Bharti, Vodafone India and Idea Cellular, we do not expect aggressive bidding," said a Goldman Sachs Global Investment Research said in its report, predicting no major surprises.
"The upcoming auction is crucial for Idea and Vodafone in our view, as they still have large amount of 3G and 4G gaps and will look to fill those. Bharti and (Reliance) Jio have very few circles without 3G and 4G, and will try to bolster their data spectrum holding," it said.
The government has put on block 2,354.55 MHz of airwaves for sale in seven bands -- 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz and 2,500 MHz -- with a reserve price of $84 billion -- against 470.75 MHz in the previous round that saw bids worth $17 billion.
"The September 2016 auction will be the first in the past three years without material 'renewal' spectrum on offer -- not a 'gun on the head' auction for most operators, in our view," Kotak Institutional Equities said.
"To this end, this auction is a critical test of the operators' rationality; an auction where operators need to guard against getting swayed by competitive spirits and bid with long-term interests in mind; no self-goal, in other words," the brokerage added.
"In our view, 1,800 MHz and 2,100 MHz spectrum bands will see most participation from telcos," added the Goldman Sachs report, a view shared in the majority of six reports analysed by IANS.
"We believe the 1,800 MHz would see demand from Airtel, Idea, Vodafone and Jio; 2,100 MHz from Airtel, Idea, and Vodafone; and 800 MHz from Jio and Reliance Communications. We do not expect the 700 MHz auction to be a success," said Morgan Stanley.
"The reserve price of the 700 MHz band is at 4x (four times higher than) the reserve price of 1,800 MHz. Thus, if an operator intends to bid for one block (5 MHz) of spectrum pan-India, it would need to spend Rs 574 billion or $8.5 billion."
In the Delhi circle, the reserve price for 700 MHz is pegged at Rs 1,595 crore per MHz -- which is the highest -- and for pan-India, it is Rs 11,485 per MHz.
"We expect Vodafone and Idea to add more spectrum in the 1,800 MHz band to enhance their 4G spectrum holdings," Edelweiss said, otherwise expecting the response to be lukewarm in thr 700 MHz band on account of high reserve price for 700 MHz band. 
The brokerage also expected some shakeout in the industry once Jio announces a full commercial launch. "We remain cautious on the sector due to sustained high capex and the anticipation of increased competitive intensity with the launch of Reliance Jio."
Bank of America Merrill Lynch also cautioned about the 700 MHz pickup, citing reasons like high pricing, relatively immature handset and equipment eco-system and theb already available 4G spectrum in other bands like 1,800 Mhz and 2,300 MHz.
The government said operators will have the choice of both upfront payments and instalment options. The service providers who win airwaves below 1 GHz bandwidth will have to pay 25 per cent upfront, and those winning above that the upfront payment will be 50 per cent.
"There are no surprises in the Notice Inviting Application apart from the 50 per cent upfront payment condition for spectrum above 1GHz. This will further burden the balance sheets of companies which are looking to acquire spectrum, especially in the 1,800 MHz band," Edelweiss said.
Deutsche Bank Market Research cautioned that increased realism on the competitive landscape will reduce the number of bidders. "We estimate total proceeds at around Rs 70 to Rs 120 billion. Furthermore, the change in revenue-share framework for spectrum payments benefits Bharti and Jio."
Bank of America Merrill Lynch also commented on the proposed move by the watchdog to scrap charges paid to carriers on whose networks calls are received. "Such a move in our view, will impact Bharti and Idea as they are net interconnect gainers and positively benefit smaller telcos and new entrant Jio."
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.


10,932 companies default on PF payouts
It should have taken 30 days for Sanjaya Kumar (27) from Odisha to withdraw his father's provident fund of Rs40,000, the post-employment, rainy day retirement stash that companies must compulsorily deduct from salaries.
Instead, more than 1,825 days have passed since Kumar's father Krushna Chandra (53) died in 2011. “Please help me withdraw PF money, my mother is worried about losing it,” said Sanjaya, in a complaint posted on an online forum.
More than 10,000 companies -- including 1,195 state-owned -- nationwide have defaulted on provident-fund payments: 2,200 companies owe at least Rs 2,200 crore-to the EPFO, the portion of employee salaries they should have deposited.
The numbers of defaulting companies and institutions is growing. There were 10,091 defaulters in 2014-15, rising to 10,932 by December 2015.
Online consumer forums are flooded with complaints like those of Kumar's, as hundreds of employees who have quit or retired from a company are deprived of their provident fund.
“We get lots of complaints from workers who have been denied their provident fund and also complaints of collusion between EPFO officials and employers,” said All-India Trade Union Congress secretary and EPFO trustee D.L. Sachdev.
A detailed questionnaire sent on June 29, 2016, to the Central Provident Fund Commissioner and the Central Vigilance Officer of EPFO and reminders on August 1 went unanswered.
In Budget 2015-16, the government decided to tax a part of provident fund. But widespread nationwide protests -- some violent, especially in Bangalore -- forced the government to rescind the decision.
The rainy day solution, hobbled by defaulting companies 
Provident funds are meant to provide financial security to salaried employees, who must contribute 12 per cent of their monthly salary with the employer contributing 13.6 per cent.
Companies or institutions with more than 19 employees deposit the provident fund of each with the EPFO, which in turn deposits the money in an employee account that earns 8.8 per cent interest from the government, which invests the provident fund in government securities and corporate bonds.
While employees can withdraw the entire amount after retirement or two months after resigning from a job, the EPFO allows partial withdrawals to pay for a home, education, marriage or an illness.
Establishments that deduct contributions from employees' salaries, but do not deposit it with EPFO are termed defaulters.
Tamil Nadu, including Pondicherry, has India's largest number of defaulting companies (2,644), followed by Maharashtra (1,692) and Kerala, including Lakshadweep (1,118).
The Airports Authority of India tops the list of defaulting institutions with a Rs-192-crore default, followed by HBL GLOBAL, Mumbai, and Ahluwalia Contracts India Limited, Delhi, with Rs 64.5 crore and 54.5 crore, respectively.
By region, Thiruvananthapuram leads with 247 defaulters, followed by Kolkata with 173 and Bhubaneswar with 115.
Companies that form their own provident-fund trusts for employees are exempt from signing up with the EPFO. In such cases, trustees are selected from company workers.
Defaulting companies must pay a penalty with an interest rate of between 17 per cent and 37 per cent, depending on the period of default.
EPFO set for a Rs 33-crore image makeover, but problems are deeper
The EPFO is set for a Rs 33-crore image makeover, which includes professional social-media management and advertisements in print and broadcast media, Mint reported on July 5, 2016.
But the EPFO'S role as a custodian of employee savings faces deeper problems: it does not tell employees that companies are defaulting until they come to settle; cases waiting for settlement are rising; and corruption with the organisation endures.
The number of EPF cases pending settlement in 2015-16 increased 23 per cent over the previous year. Although 228 police cases were registered, 14,000 inquiries started against defaulting establishments and Rs 3,240 crore was recovered in 2014-15 from defaulters, the EPFO was short of 6,000 employees on March 31, 2015. Fewer employees affect the organisation's ability to enforce provident-fund rules.
There has been a four-fold increase in cases filed by EPFO to prosecute defaulting employers over the four years ending 2015, from 317 in 2012-13 to 1491 in 2014-15.
As many as 322 corruption cases were ongoing or concluded against erring EPFO officials between 2012-February 2015. Since then, corruption cases have dropped: 167 in 2012, 75 in 2013, 72 in 2014 and 8 till February 2015.
One reason could be that an EPFO executive officer was previously given charge of an area to ensure employers within that jurisdiction did not default.
“Now notices to defaulters are sent from the Head Office, and there is no officer who can be held responsible if the company defaults in payment,” said Vivek Kumar, a former EPFO director of vigilance.
Back in Hyderabad, the reasoning makes no difference to Sanjaya Kumar.
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.



navneet choudhary

2 months ago

This is really a pain for most of the employees as they believe that since the company is deducting the money it is getting deposited and is in safe hands being unaware about its flipside. The government must take punitive damages from the Companies defaulting the PF so that these defaults are not being made.
There are various companies which do not pay the PF and consider as general creditors and continues to deduct from the employees, it when the employee leave they come to know about this.


2 months ago

EPFO is a fraud/ bogus financial institution. It should be closed permanently.

When I changed job, I applied for transfer of AMT from Hyderabad to Chennai office. It got rejected thice. The epfo employees at IT-Hub Chennai are using premitive methods, those procedures which existed during British rule under Queen Elizabeth. On enquiry on transfer, they are asking "cheque" number. Finally I approached Hyderabad office. My former company is closed, and taken over by different company. I was asked to fill varios forms, get a notary affidavit filled and other numerous forms. After 30 days I checked status , it says "Rejected! Reason for rejection not available in database" . This is hilarious. EPFO does't know why it rejected!!! We see such things in a comedy show or in mental asylum, not in a central govt financial institution.

EPFO is not giving any retirement pension or insurance or doing any favor.

It is simple variable recurring deposit if account is active. If inactive, it is simple fixed deposit.

In information technology generation, if there is no pf credit for more than 12 months, simply transfer the amount to newer account, which can be tracked using pan card or that shitty UAN number. If no new account exist then do a auto NEFT to subscriber bank account.

This should take 1 working day automatically. No need to fill junk forms.

Every Indian with pan card should declare his Permanent account number as his lifetime account. E.g he may choose ICICi as his Permanent account number. If he didn't like service s, he may choose to change to SBI.

If bank AC or epfo account becomes inoperative, people are interested to LOOT the account money rather than transfering it his Permanent account.

But if inoperative account has loan attached, then they don't leave him. They hunt the customer using goons

Arunachal Pradesh ex-CM Kalikho Pul commits suicide
Former Chief Minister of Arunachal Pradesh Kalikho Pul has committed suicide at the chief minister's residence in capital city Itanagar, the state police said on Tuesday.
Arunachal Pradesh Deputy Chief Minister Chowna Mein confirmed the news to IANS.
The police said that Pul, 47, hanged himself from a ceiling fan at his residence. 
Although Pema Khandu became the Chief Minister of the state on July 16, Pul was yet to vacate the official residence.
"We have also recovered a suicide note from the room where the former Chief Minister committed suicide. However, I am not in a position to divulge much at this moment," said a senior police official.
Pul assumed office on February 19 unseating the then Chief Minister Nabam Tuki and continued till July 13 when the Arunachal Pradesh Congress Legislature Party (CLP) elected Pema Khandu.
After becoming the Chief Minister, Pul and his supporters joined the Peoples Party of Arunachal (PPA), a regional political outfit. However, after the Supreme Court judgment reinstated the Nabam Tuki government, Pul and his supporters returned to the Congress fold and supported Pema Khandu as the Chief Minister.
Pul, who represents Hyuliang constituency in eastern Arunachal Pradesh, had been winning from the constituency for last five terms. He had served in various capacities in the Arunachal Pradesh cabinet including as the finance minister, power minister and tribal affairs minister.
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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