TRAI begins process for 2G spectrum auction

“Keeping in view the decision taken by the central government in 2011, TRAI shall make fresh recommendations for grant of licence and allocation of spectrum in 2G band in 22 service areas by auction,” principal advisor at TRAI, Sudhir Gupta said

New Delhi: Following the Supreme Court order, the Telecom Regulatory Authority of India (TRAI) on Friday started the process of auction of second generation (2G) spectrum and issued a pre-consultation paper on the same seeking views of all stakeholders, reports PTI.

The apex court, in its verdict on Thursday, had asked TRAI to adhere to the central government’s focus on allocation of spectrum only through auction.

“Keeping in view the decision taken by the central government in 2011, TRAI shall make fresh recommendations for grant of licence and allocation of spectrum in 2G band in 22 service areas by auction, as was done for allocation of spectrum in 3G band,” principal advisor at TRAI, Sudhir Gupta, said in a statement.

The Supreme Court in its order on cancellation of 122 2G telecom licenses has asked the government to seek fresh recommendations from TRAI on allocation of licences and spectrum by way of auction. The apex court has given the government a time-frame of four months to complete the process.

It is estimated that 536 Mhz of 2G spectrum will be freed following the cancellation of the 122 licenses.

Almost a year ago, TRAI had recommended fixing the price for 6.2 Mhz of pan-India start-up 2G spectrum at Rs10,972.45 crore, more than six times the cost of Rs1,658 crore at which the spectrum was allocated to new players whose licences have been ordered to be cancelled by the Supreme Court.

The recommended spectrum price varied from circle to circle.

In case of contracted limit, the price ranges from Rs7.60 crore per Mhz in Jammu & Kashmir to Rs187.38 crore per Mhz in Tamil Nadu.

For the additional spectrum, the range is Rs22.89 crore in Jammu & Kashmir to Rs431.95 crore in Andhra Pradesh.

Mr Gupta cited that TRAI has already recommended that all future licences should be unified licences under ‘Spectrum Management and Licensing Framework’ guidelines of May 2010.

Also, it has said that spectrum should be delinked from licence.

“Pursuant to this recommendation, ‘Draft Guidelines for Unified Licensing Regime’ were also placed on TRAI website,” Mr Gupta said.

On the issue of ‘Allocation of spectrum in 2G band in 22 service areas by auction’, TRAI has requested stakeholders to send their comments and suggestions on the issues involved by 15th February.

“Keeping in view the time-bound nature of exercise, no extension of time will be given,” Mr Gupta said.


PSU banks’ exposure to telecom cos over Rs14,000 crore

Financial services secretary DK Mittal said that though the total funds provided by PSU banks to telecom companies hit by the Supreme Court order was Rs14,345 crore, the amount involved in 122 cases was limited to Rs3,299 crore and it is not a matter of concern

New Delhi: The government on Friday said public sector banks have a total exposure of over Rs14,000 crore to telecom companies whose licences have been cancelled by the Supreme Court though a bulk of the amount is backed by securities, reports PTI.

Out of the total exposure of Rs14,345 crore, only Rs2,888 crore given to big companies, including Idea Cellular, Tata Telecom, Uninor and Videocon, is unsecured.

“Rs14,345 crore is total exposure to telecom companies... Out of this Rs2,888 is to big companies Idea, Tata Telecom, Uninor and Videocon which does not have security except telecom licence and assets created by these companies,” financial services secretary DK Mittal told PTI.

He further said that though the total funds provided by PSU banks to telecom companies hit by the Supreme Court order was Rs14,345 crore, the amount involved in 122 cases was limited to Rs3,299 crore and it is not a matter of concern.

“Public sector banks have no exposure which is totally uncovered,” he added.

The Supreme Court on Thursday cancelled 122 second generation (2G) spectrum licences granted by former telecom minister A Raja on the ground that they were issued in a “totally arbitrary and unconstitutional” manner.

Many of these large companies will not go out of operations following the Supreme Court order as they have valid licences in other circles, he said.

In the case of Tata Teleservices, which has a pan-India presence, only three licences were cancelled. The number of cancelled licenses was nine in the case of Idea Cellular and 22 in case of Datacom Solution promoted by Videocon.

Punjab National Bank (PNB) said its exposure for roll-out under 2G is limited to Rs508 crore. However, the bank did not give any loan for seeking licence.

PNB has total exposure of Rs10,923 crore to the telecom sector. Of this, the bank’s exposure to the government sector is Rs1,016 crore, the bank said.

“I don’t think we will be affected much by the verdict.

We have a fund-based exposure of Rs1,100 crore in five accounts, while another Rs3,400 crore are non-fund based, which is based on a guarantee of roll-out. Now that the licences are cancelled, that guarantee is not fulfilled,” SBI deputy managing director (DMD) Santosh Nair had said on Thursday.

Another state-owned lender, Corporation Bank, said it has exposure of Rs146 crore in one of the telecom companies hit by the order.

“We have Rs146 crore exposure to Videocon Mobile. Though it is a secured funding, we are a bit worried as to how it will pan out post the Supreme Court verdict,” Corporation Bank chairman and managing director Ajay Kumar had said.

Even Oriental Bank of Commerce (OBC) said the bank had disbursed loans to telecom companies whose licences have been cancelled.

Loans have been given to all leading players. However, there are some concerns on the loans given, a senior official of OBC said.


Market seems stretched: Friday closing report

Nifty may move in the range of 5,220 and 5,395

The Asian indices opened cautiously and the domestic indices too were range bound for the major part of the trading session. However, in the last hour, the indices pushed higher extending the significant rally that started in late December. Today Nifty hit the highest intra day high since 31 October 2011.   From here we may see the Nifty moving in the range of 5,220 and 5,395.The National Stock Exchange  (NSE) saw a volume of 81.24 crore shares.

At the end of the session the Asian market were a mixed bag ahead of key US jobs data which will be out later today, which will offer more clues over the global growth and appetite for risk, while Greek debt restructuring talks dragged on.

The Sensex and the Nifty opened at 17,444 and 5,276 respectively. In the morning range bound session the respective indices hit their intra- day low at 17,383 and 5,256. Last hour of the trading session saw a huge jump taking the benchmarks to intra-day highs of 17,631 and 5,335. The Sensex closed at 17605, 173 points up (0.99%) while Nifty closed at 5326, 56 points up (1.06%). Both the Sensex and the Nifty had the highest closing since 31 October 2011. The advance-decline ratio on the NSE was 1115:655.

Among the broader indices, the BSE Mid-cap index surged 1.28% and the BSE Small-cap index climbed 1.17%.

The BSE Metal index (down 1.09%) was the lone loser in the BSE sectoral indices today. While all the other 12 sectoral indices gained, BSE Realty topped with gainers (up 2.15%). The others gainers among the top five were, BSE Healthcare (up 1.69%), BSE Power(up 1.49%), BSE FMCG(up 1.44%) and BSE Bankex(up 1.42%)

In the 30-share Sensex pack, 24 stocks gained while six fell. Among the top five gainers, NTPC (up 2.71%); Hindustan Unilever (up 2.69%); Sun Pharmaceutical (up 2.38%); DLF (up 1.97%); BHEL (up 1.93%). While the bottom five losers were Hindalco Industries (down 3.08%); Jindal Steel (down 2.66%); Tata Steel (down 1.56%); Sterlite Industries (down 0.97%); Hero MotoCorp (down 0.69%).

India's services sector grew at its fastest pace in six months during January as new businesses swelled, extending the previous couple of months' positive trend into the new calendar year, a survey showed.

The HSBC Business Activity Index, compiled by Markit and based on a survey of around 400 firms, bounced to 58.0 in January from 54.2 in December.

That was the third month the index has been above the 50-mark separating growth from contraction.

India's economy is expected to grow by 7 to 7.5 percent in the current fiscal year ending March, Prime Minister Manmohan Singh said in a speech on Friday. Gross domestic product grew 8.4 percent in the year tosince March 2011.

Reserve Bank of India Deputy Governor Subir Gokarn said the monetary authority will cut interest rates once it i's confident that inflation will keep slowing.

European was trading in green on the back of encouraging macroeconomic data in the euro zone and the UK. The data on Friday showed that the euro zone's private sector economy snapped a four-month decline in January and expanded, although very weakly,. aAccording to a  business survey  that hinted the euro zone may avoid recession. Britain's dominant services sector expanded at the fastest pace in 10 months in January. Investors have become more confident of a debt swap deal involving Greece and its private sector creditors, and that the country can avoid a disastrous default.

Back home, Bajaj Hindusthan, today said it has fully repaid external commercial borrowings (ECB) worth $80 million (about Rs389 crore). The ECB of 9.191 billion yen in form of syndicated term loan facility, which was raised in 2006-07, for the purpose of financing the capital expenditure, has been repaid in full on its due date 27 January 2012, upon completion of its average maturity of 5 years. Bajaj Hindusthan rose 1.85% to close at Rs35.70 on the BSE.

Madras Cements today reported a 77% rise in net profit for the quarter ended December to Rs76.84 crore on the back of higher sales. Net sales of the company also increased to Rs741 crore during the October-December quarter of the current fiscal from Rs579.21 crore in the same quarter last fiscal. Madras Cements rose 3.48% to close at Rs129.40 on the BSE.


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