Companies & Sectors
Telecom Commission permits 4G airwave holders to offer voice services

The internet service provider licence holders who hold BWA spectrum, if they wish to provide mobile services using that spectrum, then an additional fee of Rs1,658 crore will be levied for migration to Unified Licences,” Telecom Commission chairman and telecom secretary R Chandrashekhar said

Inter-ministerial body, Telecom Commission (TC), on Monday approved provision for companies holding internet services licences with spectrum to provide phone call service by paying additional fee of Rs1,658 crore each.


“The Commission broadly endorsed recommendation of the DoT (Department of Telecommunications) committee with regard to Unified Licensing regime... The ISP (internet service provider) licence holders who hold BWA spectrum if they wish to provide using that spectrum then an additional fee of Rs1,658 crore will be levied for migration to Unified Licences (UL),” TC chairman and telecom secretary R Chandrashekhar told reporters.


The framework for new licences will be ready by end of this financial year, he added.


In 2010, six private players—RJI, formerly Infotel Broadband, Bharti Airtel, Aircel, Qualcomm, Tikona Digital and Augere—had won BWA spectrum.


Bharti Airtel and Aircel have unified access services licence under which they are allowed to provide phone call services both on fixed as well as landline. Other companies were given Internet Service Provider (ISP) licence that has restrictions on providing phone call services across networks.


The additional amount of Rs1,658 crore was charged from telecom players till 2008 for providing mobile telephony.


The licence issued to mobile telephony operators for Rs1,658 crore had 4.4 Mhz spectrum bundled with it but government has announced providing no spectrum with UL. The current value of the quantum of spectrum allocated under old licences has increased around seven times.


“UL does not include any spectrum. Grant of UL including migration to UL does not include any spectrum,” Mr Chandrashekhar said.


The TC, however, deferred decision on bringing telecom tower companies, called IP-1, under licences.


“Issue of IP-1 operators under UL regime was deferred and it was decided that this required further study of certain aspects,” Mr Chandrashekhar said.


Companies like Bharti Infratel, GTL Infrastructure and Indus Towers are involved in IP-1 business. The DoT committee had recommended bringing IP-1 companies under licence regime.


Telecom regulator TRAI has recommended a charge of 8% licence fee to IP-1 companies once they are brought under licences.


For companies who wish to continue to “provide limited services like only internet services under cafeteria approach they can do so with a lower entry fee which will be same as present,” the telecom secretary said.


The TC also endorsed around Rs3,000 crore support for mobile services in the left-wing extremist affected areas through Universal Service Obligation Fund for a period of five years.


“This proposal will have to be finally approved by the Cabinet,” Mr Chandrashekhar added.


Govt calls off Rs 12,000 crore bond auction to rein in fiscal deficit

With this, the total market borrowing by the government in the current fiscal would come down to Rs5.58 lakh crore from Rs5.70 lakh crore as envisaged in the 2012-13 Budget

The government has called off Rs12,000 crore bond auctions, lowering its market borrowing programme for the current financial year in its bid to contain the fiscal deficit at 5.3%.


With this, the total market borrowing by the government in the current fiscal would come down to Rs5.58 lakh crore from Rs5.70 lakh crore as envisaged in the 2012-13 Budget.


“On review of the government’s cash position and funding requirement, it has been decided, in consultation with Reserve Bank of India (RBI), to reduce the government market borrowing through dated securities by Rs12,000 crore for the current financial year,” the finance ministry said in a statement.


The government has already borrowed Rs3.7 lakh crore in the first half ending 30th September, which is 65% of the total planned borrowing.


The front-loading of borrowing was done as part of its strategy to make available capital to the private sector in the last six months of 2012-13.


Finance minister P Chidambaram had in November 2012 raised the fiscal deficit projection for the current financial year to 5.3%, from 5.1% estimated in Budget.


The government has already asked the ministries to curtail their non-plan expenditure and avoid spending rush in the January-March quarter.


Its cash position has improved with flow of over Rs14,000 crore through disinvestments alone in February. Until now the government has collected around Rs 21,500 crore from PSU stake sales as against a fiscal target of Rs30,000 crore.


Chidambaram plans to bring down fiscal deficit to 4.8% of GDP in 2013-14 fiscal.


National Peroxide reports impressive results; net profit up 34%

National Peroxide (one of our Street Beat picks) has posted third quarter results, with both sales and profit trending upwards. We had recommended the stock for the 8-21 February 2013 issue at Rs474. The stock closed at Rs479 today

We recently wrote about National Peroxide in our 21 February issue (now on stands). Its net sales for the third quarter ended December 2012 grew by 27% year-on-year (y-o-y) to Rs53.76 crore. Likewise, for the same period, operating profit grew 22% y-o-y, from Rs14.33 crore to Rs17.5 crore. The increase in operating profit was helped by an increase in the sales volumes of both hydrogen peroxide and hydrogen gas. Net profit grew by 34% y-o-y to Rs10.58 crore.

A detailed look into the company’s numbers on Moneylife database shows that the company exhibits a cyclical nature as far as fundamentals are concerned. For instance, its net sales have been see-sawing between growth and moderation. At the moment, it seems to be moderating slightly due to pressing economic circumstances. Despite this, its growth rate in net sales was a healthy 22%, though far below its three-month y-o-y growth rate average of 57%. Similarly net profit grew 22% y-o-y, less than the 115% y-o-y growth rate for the preceding three quarters. Despite its cyclical nature, its return on networth is an impressive 29%. But it is for the same reason that its valuation is low as demand for cyclical depend on perfect timing. The company’s market capitalisation is quoting at nearly four times its operating profit, which is attractive.    

Earlier, last year there was a plant shutdown of 72 days from 11 April 2011 till 21 June 2011 for expansion of the plant during the previous year. National Peroxide has chalked out plans to expand capacity to 1,50,000 mtpa over the next few years. It gets its raw materials from Gas Authority of India (GAIL) and is heavily dependent on gas supply.

National Peroxide is a pioneer in India for peroxygen chemicals and is the largest manufacturer of hydrogen peroxide, which is used for bleaching, chemical synthesis, effluents.

National Peroxide closed at Rs479 on Bombay Stock Exchange (BSE), up 0.61% from its previous close. 

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