Expect more from your mobile

Reliance is offering calls at 50 paise a minute in a prepaid package. Virgin has already offered 10 paise for incoming calls. This is just an indication of the windfall gains that a mobile subscriber can expect in the days to come.

 

The race among mobile telecommunication service providers translates in to a growing opportunity estimated at more than 700 million by 2012 from the current 300 million, at a CAGR of 21%, says strategic research company IndusView that advises multinational companies on business opportunities emanating from India’s fast growing economy.

 

IndusView says in an email response that “Communication is a necessity.” “The related costs of owning a handset and usage charges (tariffs) in India are among the lowest in the world. To add to that, the service providers are offering innovative tariff packages even while touching the lowest band and are willing to further lower the packages to bring new subscribers in to their fold,” says Mr. Bundeep Singh Rangar, Chairman of IndusView Advisors Ltd.

 

Apart from the vanilla voice and text services that the mobile services are widely associated with, the advent of next generation platforms like 3G and progressively 4G, will exponentially accelerate the possibilities of innovative applications that can be bundled on to the networks and delivered at the subscribers’ finger tips in the hi-tech mobile handsets, Mr Rangar says.

 

The subscriber growth targets and evolving technology landscape calls for corresponding high capital investments which is pegged at about $73 billion over the next five years. And, a major chunk of the investment is expected to be realized through Foreign Direct Investment (FDI), particularly in the area of mobile communication.

 

The recent string of investments in Indian telecom companies, including, Tata Teleservices Ltd by NTT DoCoMo, Inc; Unitech Telecom, the telecom arm of India’s second largest real estate developer Unitech Ltd by Norwegian telecom firm Telenor ASA, world’s seventh largest telecom service provider at $1.36 billion; and Swan Telecom, a start-up GSM telecom service company of a Mumbai-based real estate developer Dynamix Balwas Group by Dubai-based Emirates Telecommunications Corp (Etisalat) at $900 million; or, South Africa’s largest telecom company MTN Group’s attempts to enter the Indian market are examples of overseas companies that have exhibited confidence in the potential of the Indian market. 

 

Stating that the country’s tele-density has jumped to about 30% now from less than 1% in the 80s, Mr Rangar points out that there is still a large population that needs to be offered the benefits of the basic communication services – that is how the target of achieving a tele-density of about 45% is set for the next five years by the government of India. The service providers – both the state owned and the private sector – would be aiming to surpass that target and garner the maximum possible chunk of that potential subscriber base. 

Star-studded IFFI-08 starts; Rekha does the honour

PANJIM, Goa:The 39th International Film Festival of India (IFFI-08) started today in star studded Kala Academy at Goa in a colourful function with the legendary bollywood Actress Rekha ighting the ceremonial lamp.

The inaugural lamp was lit with the assistance of Telugu Actress of Goan origin Illina D.Cruz. Amrita Rao, an upcoming Actress hosted the Inaugural Function as the Master of Ceremony. The luminaries present were, inter alia, the Speaker of the Assembly, Shri Pratap Singh Rane, Panjim Mayor Tony Rodrigues bollywood doyens Randhir Kapur, Sachin, Tabu and Tisca Chopra.

The Indian film industry is believed to be the largest in the world – producing over a thousand films a year in different languages. At a time when every sector of our economy is being influenced and in most cases taking the benefits of the currents of globalization, our film industry can utilize this opportunity too, the Minister added. He assured the film fraternity of all possible support from the Government that would lead to promotion of good cinema.

The Indian programming at IFFI – 2008 would be under seven different segments with screening of 83 films. Besides the section Indian Panorama wherein 26 Feature and 21 Non Feature films will be screened. The Indian programming would have Retrospective of Legendary Director Bimal Roy and L.V. Prasad. Udayer Pathe, Devdas, Bandini, Gautama the Buddha, Remembering of Bimal Roy and Do Bigha Zamin will be screened in Retrospective on centenary of Bimal Roy. Other Retrospective on legendary Director and Producer L. V. Prasad on his birth centenary will have the screening of Dadi Maa and Ek Duje ke Liye.

Under the Lifetime Classics, Mughle- A – Azam of Dilip Kumar, Hum Aapke Hai Kaun & Dil Ek Mandir of eminent singer Bharat Ratna Lata Mangeshkar, Anbe Vaa and Kittur Channamma of eminent Kannada Actress B. Saroja Devi and Kabuliwala of Tapan Sinha will be screened. G. P. Sippy, B. R. Chopra, F. C. Mehra, Jayshree Gadkar, Raghuvaran, Mahendra Kapoor, Jeeva, Sridhar, Vijay Tendulkar and Nabendu Ghosh will be paid tribute under Homage section.

The Jury members of Competition Section, Peter Chan, Mr. Marco Mueller, Ms. Niki Karimi, Mr. Lav Diaz and Ms. Tabassum Hashmi were felicitated during the Inaugural Function. Chinese film ‘Warlords’ was screened as the opening film. The Director of the opening film Mr. Peter Chan and the crew of the film were introduced to the audience before the screening of the film.

Let’s fight the crisis united, says PM

NEW DELHI: Prime Minister Dr Manmohan Singh today expressed the confidence that India will survive the current global financial crisis and emerge stronger “if we have the imagination, sense of unity and the will to work together as a united nation”.

Addressing the HT Summit 2008 in New Delhi, Dr Singh noted that the global economy is today, going through choppy waters. “Our century I sincerely believe will be shaped by how we respond to the global economic crisis today. If nations look only inwards and imagine that they can solve their problems on their own, they will fail and fall. The world has become more integrated and inter-dependent. In both good and bad, in prosperity and peril, in opportunity and crisis we must recognise the new inter-dependencies of nations and no nation is an island into itself,” he said.

Competitive politics must not be allowed to divide our people on the basis of religion, caste or region. At home and globally we seek an inclusive growth process.

He recalled that at the recent G-20 Summit last week he has urged world leaders to recognise these inter-dependencies and our stake in our collective future. We need a global safety net so that the poor of the world do not pay a price for the profligacy of the rich, and the delinquency of a few.

He said: “Global problems require global solutions. This is the most important lesson of the past century for the present century. But global institutions of governance must be made more inclusive and more representative. The voice of the developing world must be heard in the high councils of global decision-making.”

Level playing field for new telecom players

Are the new entrants to telecom field being unduly favoured by the telecom Ministry?

 

An adage which is much older than the Indian Telegraph Act 1885 says that you cannot compare an apple with an orange. Even in telecom, an Orange (pun unintended!) has to be compared with an orange. That is what level playing field is all about, says a top telecom ministry official.

 

Asked to comment on the widespread allegations that certain new telecom players like Swan and Unitech have been unduly favoured as they secured spectrum on the basis of fee pegged in 2001, the official explained that the price has  not yet been changed ever since deliberately.

 

“One has to keep in mind the government’s overall objective of growth, affordability and even penetration of wireless service in small towns and rural areas,” he said and pointed out that even TRAI does not favour any change in the fee structure and auction for spectrum.

 

The unchanged license fee also serves as incentive to telecom players to extend their networks to relatively low-revenue semi urban and rural areas. Otherwise, the government would have to subsidise the rural network expansion, the official said.

 

Even when the Cabinet decided on pricing for the fourth operators in 2003, it was based on TRAI recommendation and the same principle was applied last year when the new entrants were given licenses.

 

The government fully respected the telecom industry’s argument for a level playing field for all players and hence did not impose any restrictions for its growth. “This has also immensely contributed to the country emerging as the world’s fastest growth telecom market, adding over 8 million subscribers every month,” the official explained.

 

The country wireless subscriber base is 300 million strong today and is expected to double to 600 million mark in the next four years.

 

Any increase in the fee or allowing spectrum to be auctioned would in effect mean injustice to new players as it could jeopardize the tariff structures. With the telecom market witnessing immense tariff war, the new players would have been put to disadvantage visa-vis the existing players and this would have gone against the principles of level playing field, the official said.

 

DoT has been maintaining that the new licenses have been issued as per TRAI policy guidelines.

 

 

Exploding the Rs 50,000-cr-loss myth!

Would the government have earned Rs 50,000 crore had it auctioned the telecom licenses instead of allotting them to new players on a first-come-first-served basis?

 

Certain political and industry pundits, who sprang up a new theory for valuations, seem to believe so.

 

The propagators of the new theory apparently construe that new telecom players like Unitech and Swan Telecom secured whopping sums of FDI based on the licenses that they procured from the DoT.

 

But the fact of the matter that the money being paid by foreign companies to acquire stake is for buying their right to build, operate and run a Greenfield telecom project, and not merely for the license or for paying off the promoters. In other words, the foreign players are not paying these amounts for the licenses alone.

 

Even Telecom Minister A Raja firmly denied the allegation that the state exchequer lost hreavily in the spectrum allocation to new players.

 

Industry watchers point out that that the money being pumped into these new companies would be utilized for the roll-out obligations and would obviously come in tranches. Another fact to remember here is that the money that is being brought in is FDI and it is well within the government policy norms aimed at creating additional telecom infrastructure ultimately for the benefit of the consumer.  

 

According a leading investment banker, the capital infusion that comes into a company is normally meant to expand its equity base. Here, the new telecom companies are not divesting their respective holdings, either. Moreover, the foreign partners are bringing in the money to the joint ventures for his part ownership of the companies.

 

“It is, therefore, not at all correct to compare the value paid by the Indian companies for the license with hypothetical sums that the government could have earned through an auction,” the banker said.

 

Going by this theory that assumes a loss of Rs 50,000 crore to the exchequer, one could stretch one’s imagination to base valuations of steel companies on the basis of iron ore mines from where they source their raw material. Or for that matter, power generation companies’ valuations could go hay-wires if one had to base them on the value of coal mines that they work with. Illogical, it may sound. But is there a place for logic in politics and business rivalry?

 

Analysts point out that the valuation of a company depends on multiple factors like the business opportunities in a particular country, the venture’s business plans, the growth projections and the capability of the potential partner.

 

 

UK help sought in infra PPPs

NEW DELHI: Union Minister of Commerce & Industry Kamal Nath has stated that the infrastructure development is a vital area for India’s economic growth.

During his interaction with Douglas Alexander, Secretary of State for Department of International Development, UK, here last evening, Nath emphasised that there is an excellent opportunity for UK expertise as well as investments In India.

“We need to generate interests in the large number of PPP projects being explored in India”, he added. Both sides also discussed about the present global financial crisis and the impact on trade.

The meeting was also attended by G.K. Pillai, Commerce Secretary apart from senior officials from both the countries.

Both sides discussed the possibilities for early conclusion of the Doha Round Negotiations of the WTO. Shri Kamal Nath explained that India continues to believe strongly in a rule-based, transparent and fair multilateral trade regime. “One of the factors which will have an important bearing on the conclusion of the Round is whether the developed countries would be willing to show the necessary flexibility for finalizing a multilateral deal. However, India has been engaging constructively and actively with other fellow member countries of the WTO in the expectation that this would be forthcoming. A conclusion would of course depend on whether the WTO members are faithful to the mandate and the final outcome reflects a clear balance between market opening and the development needs of the majority of the membership”, he added.

Both sides agreed that there is a huge potential for bilateral trade and investment in view of shared interests and a long history of relations. It was felt that the potential area for growth in trade and investment are agri-business, healthcare, infrastructure, high-technology, legal services, accountancy services and financial services. Shri Kamal Nath informed the visiting Secretary of State that Indian healthcare industry is keen for tie-ups with the UK health insurance industry for offering healthcare facilities in India.

The cumulative foreign direct investment (FDI) inflows from the UK during 1991-2008 was to the tune of US $ 5.03 billion. The top sectors that attracted FDI from the UK were: telecommunications, fuels (power & oil refining), chemicals (other than fetillisers and services sector (financial & non-financial). The top investment areas by Indians in the UK are: software development services, pharmaceuticals, textiles and handicrafts.

The total bilateral trade between India and the UK during the year 2007-08 was US $ 12 billion (exports – $ 7 billion and imports – $ 5 billion). During 2006-07, the bilateral trade was US $ 9.8 billion (exports – $ 5.6 billion and imports – $ 4.2 billion). The main exports to UK were: readymade garments, petroleum, machinery & instruments, gems & jewellery, footwear etc. The main imports from the UK were: precious & semi-precious stones, electronic goods, silver, transport equipments, metalifers ores and metal scrap etc.

The present Indo-UK Joint Working Groups is in the sectors of hi-tech, IPR (intellectual property rights), accountancy, legal services, infrastructure, healthcare, financial services and company affairs. The 5th Meeting of the Indo-UK JETCO (Joint Economic and Trade Committee) is scheduled to be held in New Delhi on a date to be decided mutually.

Don’t give up on India, Kamal Nath tells foreign investors

NEW DELHI: Union Commerce Minister Kamal Nath today said that world would benefit tremendously from a stable, large  and growing consumer market provided by India and added that this is not the time for foreign investors to give up on India.

“Foreign investors who withdraw equity investments or shelve FDI plans in India will find themselves behind the curve as our economy picks up its 9-10% pace once again,” he said addressing the Plenary Session on “Securing Opportunities for Inclusive Growth in India” at the India Economic Summit here.

Kamal Nath pointed out that India’s reform process has allowed millions of poor people to cross the poverty threshold and added that there is still a lot of room for further reforms in key areas such as public private partnerships, financial sector, and taxation, among others. He said that much action remains on the agenda table for integrating further with the global economy and becoming a vital link in the international supply chain of goods and services, funds and capital, and resources and talent.

The 3-day (16-18 November) Summit is being jointly organized by the Confederation of Indian Industry (CII) and World Economic Forum.

Kamal Nath emphasised that inclusive growth ultimately depends on the productivity of the overall workforce, which in turn is dependent on its education, skill development, technical and professional education, and talent resource levels. India’s workforce numbers around 500 million people and is expected to expand by about 20 million each year for the next ten years. “But 600 million people continue to depend on agriculture as a source of livelihood. While agriculture has been expanding at close to 3% annually, there is need to move people off the land in order to enhance their productivity and increase their incomes”, he added.

Speaking about India’s engagement with the world, he said that India’s total exports in 2004-05 was at $ 83.5 billion, whereas in 2007-08, it exceeded the targets and achieved a doubling of trade to $163 billion and this year, for the period April to September export growth was 31% over the same period last year. At the same time, we continue to be a solid market for overseas goods, he underlined and added that India’s imports have gone up from $ 112 billion in 2004-05 to $ 251 billion in 2007-08 and non-oil imports increased at a rapid clip of 43%. “When we include export and import of services, our external engagement can be placed at over $ 525 billion for the past year, which adds up to more than half of GDP. This is unprecedented in India’s modern economic history”, he said

Indian Railways on the right track

by Harish Kunwar
(Assistant Director, Press Information Bureau, New Delhi)

 

Over the decade, private sector participation in the railway sector has increased, though it remains limited.  The public-private partnership (PPP) model is becoming increasingly popular in order to mobilize capital and improve operation and management skills.  In the past, IR made several attempts to involve the private sector through works or management contracts in areas such as catering wagon ownership and leasing, and joint ventures (JVs) for rail infrastructure projects.  As a result, several initiatives were taken up on a PPP basis.  These included commercial utilization of railway land, private operation of container trains, catering services, warehouses and wagon procurement.  A number of PPP projects are also on the anvil.  These include construction of dedicated freight corridors, modernization of railway stations, manufacture of rolling stock, utilization of vacant railway land, development of railside warehouses, construction of passenger terminals and development of VSAT hubs.

 

It has been assessed that Indian Railways would need to spend around Rs. 2,51000 crore (US$62 billion) on various capacity enhancement measures over the next five year period.  A major part of the investment would come from internally generated resources.  Budgetary support to the extent feasible would also come forth.  However, to meet the massive investment needed, these would need to be leveraged to mobilize adequate level extra budgetary resources.  Around Rs. 1,00,000 crore is expected to come from extra budgetary resources including Public Private Partnership (PPP). PPP would, thus, play a crucial role in the attainment of the strategic goals outlined above.

 

Construction of DFC

 

It has been planned to construct a new Dedicated Freight Corridor (DFC), initially covering about 2700 route kms. equivalent to around 5000 track kilometers at an approximate cost of Rs. 28000 crore (US$6 billion) linking the ports of western India and the ports and mines of Eastern India to Delhi and Punjab.  The construction of this corridor will be implemented through an SPV being created for the purpose through a mix of  Engineering Procurement and Construction (EPC) and PPP methods.  Ministry of Railways is in the process of  selecting a global consultant to advise on the concession agreement, principles of track access charges and other financing and bidding issues.  It is envisaged that innovative ideas on design, construction and maintenance of railway to achieve optimal life – cycle costs would be forthcoming through PPP especially as the work progresses on the initial two corridors and further corridors are taken up.  The concessionaire could also tap additional ancillary revenue streams through commercial exploitation of and, construction of freight terminal/logistic park/ICDs etc.

 

World Class Railway Stations

 

Railway stations at metropolitan cities and important tourist centres need to be modernized to provide world-class passenger amenities and services to the large multitude of passengers using these stations.  Indian Railways is planning to do so by attracting private investments in the area by leveraging the land around and airspace above the stations.  The concessionaire would be expected to construct and maintain the operational and passenger areas free of cost, share the revenue earned from the real-estate created and hand over the same after the concession period.  Altogether 26 stations have been identified in the first stage.  These are CST Mumbai (Carnac Bunder), Pune, Howrah (Kolkata), Lucknow, New Delhi, Anand Vihar and Bijwasan at Delhi, Amritsar, Chandigarh, Varanasi, Chennai, Thiruvananthapuram, Secunderabad, Ahmedabad, Patna, Bhubaneshwar, Mathura, Agra, Gaya, Bangalore, Jaipur, Nagpur, Tirupati, Bhopal, Kanpur and Guwahati.  Pre-qualification process for bidders for the pilot project for New Delhi Station has been initiated.  Redevelopment of Patna, Secunderabad and Mumbai will also be taken up during the current year.  Development of other stations and green field passenger terminals would also be taken up subsequently.

 

Commercial Utilization of Land

 

Indian Railways has approximately 43,000 hectares of vacant land.  These are mostly alongside track in longitudinal strips, around railway stations, and in railway colonies especially in metro and other important cities/towns with potential of being used commercially to generate revenue as well as capital for modernization and capacity addition.  A new body, namely Rail Land Development Authority (RLDA) has been set up under the Railway (Amendment) Act 2005 to pursue, interalia, the main objectives of generating revenue and up grading railway assets.  110 sites have already been entrusted to RLDA.

 

SPV for manufacturing

 

With sustained economic growth and the resultant demand for rail transport the requirement of rolling stock has increased manifold.  The requirement of coaches/Electrical Multiple Units is projected at 22689 vehicle unit for the XI Five Year Plan  The gap between the requirement and the combined capacity of the two Production Units at Integral Coach Factory, Perambur  and Rail Coach Factory, Kapurthala (around 2500 per annum) is planned to be bridged by augmenting the existing capacity of these Production Units and setting up a new manufacturing unit through a JV under PPP.

 

Similarly, the requirement of Electric and Diesel Locomotives has been projected at 1800 each during the XI Five Year Plan i.e. 360 locos per year.  The existing in – house capacity for the manufacture of these locomotives is presently 150 per annum for Electric and for Diesel.  The gap between the requirement and capacity is also planned to be bridged by setting up two locomotive manufacturing units one each for diesel and electric locomotives through PPP.  Possibility of PPP through long-term demand guarantee to prospective manufactures of modern wagons is also being explored.

 

High Speed Corridors

 

Pre-feasibility studies are being awarded for a few identified corridors to examine.  Linking a few of our bustling metropolises with a high speed rail links to facilitate train travel over 600-1000 km within 2.5 to 4 hours.  All options including PPP will be explored.

 

Multi-modal Logistics Parks

Private operators have been allowed to manage rail-borne Container Services on Indian Railways.  Concession agreement setting out the terms of such operation has been signed with 15 private operators.  The scheme is also open for other operators to join.  So far private operators have inducted 45 rakes and built three ICDs at Garihassru, Patli and Loni.

 

Policy framework  to facilitate setting up  of Multi-modal Logistics Parks (MLPs) in SEZs or private land with rail connectivity has been formulated.  The policy also evisages utilization or surplus railway land available at suitable locations for development of MLPs and/or bulk or  dedicated freight terminals.

 

Wagon investment Scheme

 

The Wagon Investment Scheme (WIS) with provisions for freight rebate and supply of guaranteed number of rakes over periods ranging from 7-15 years for various categories of wagons has been in operation for the past few years.  The scheme is being replaced by a new scheme to broaden its appeal to investors providing high-capacity and special purpose wagons.  A scheme to facilitate third-party leasing of wagons is also under finalization.

 

Port Connectivity works

 

Rail Vikas Nigam Limited (RVNL) has been mandated to undertake capacity augmentation works and port connectivity projects by establishing Special Purpose Vehicles (SPVs) Some of the projects taken up or under consideration of RVNL include Palanpur-Gandhidham gauge conversion project (linking Kandla and Mundhra ports to North India), Haridaspur-Paradeep New Line (linking iron ore mines of Orissa and Jharkhand to Pradeep port), Anugul-Sukinda (linking iron-ore and coal-belts of Orissa),  Obulavaripalli-Krishnapatnam – New Line Project linking the Krishnapatnam port of Andhra Pradesh, Bharuch-Dahej and Surt-Hazira projects in the State of Gujarat and Penn-Rewas Port link (Maharashtra)

 

Catering etc.,

 

Indian Railway Catering and Tourism Corporation (IRCTC) has been mandated to develop catering services, budget hotels and food plazas at major stations through involvement of private entrepreneurs.

 

IRCTC is commissioning new Food Plazas  in Railway premises with private participation.  The license period for  food plazas is of nine years with a provision of extension of three years.  Already 53 such Food Plazas have been commissioned.

 

Indian Railways is also in the process of carrying out an examination of the scope of need-based ‘base kitchens’ and ‘launderettes’ with public private partnership to strengthen  the infrastructure for on-board services. Call centers are also being planned under PPP by IRCTC to cater to the need for information dissemination to the railway customers.

 

Apart from the above projects, for which Indian Railway Catering and Tourism Corporation (IRCTC) would act as a nodal agency, Indian Railway is also planning to launch new services for the luxury tourism segment on the pattern of ‘Palace on Wheel’ in partnership with interested State Governments. (PIB Features)

Hi Manmohan, says Obama

NEW DELHI: In a significant development, President-elect of the United States Mr. Barack Obama called the Prime Minister this morning. The Prime Minister congratulated Obama warmly and said that his historic victory was a source of inspiration for oppressed people all over the world.

Obama praised the Prime Minister’s contribution to the progress of India both as Minister of Finance earlier and now as Prime Minister. He said that the US-India strategic relationship was a very important partnership and that the new administration wanted to work together with India on all important global issues.

The Prime Minister said that relations between India and the United States were very good but that we could not be satisfied with the status quo. The Prime Minister conveyed his best wishes for the success of the new administration in meeting the enormous challenges that face the world and invited the President-elect and Mrs. Obama to visit India . He said that a warm welcome awaited them. The President-elect said that he wished to make an early visit to India

Slow growth? Don’t worry, says Manmohan

MUSCAT: Admitting that the Indian economy growth this year could be slow due to the current global financial crisis, Prime Minister Manmohan Singh has averred that there was nothing to worry.

 

“However, we still hope to achieve a growth rate of seven to seven and a half per cent next year. The fundamentals of the Indian economy are very strong. Our banking system and financial institutions are well capitalized and their depositors are wholly secure,” Dr Singh said speaking at Oman.

 

“I have constituted a high level committee to monitor the evolving global situation and suggest short-term and long-term measure to use this opportunity to further accelerate our growth,” he told the NRI community at a reception. “I hope that you will continue to display the same confidence in the future and invest in the future of our children and grand children,” he said.

 

There are over 130 companies from India who are currently engaged in Oman. Several Omani companies are engaged in business in India. We will continue to encourage a much greater flow of investment into each other’s countries.

 

The Prime Minister said; “The Government of India is constantly alive to the welfare of the Non-Resident Indian community. Yesterday, a Memorandum of Understanding was signed between India and Oman on Labour Mobility, Protection and Welfare of workers. This important initiative will provide a framework for strengthening cooperation between our two countries in the field of human resource development.”