New Delhi, July 9
State-run BSNL, a quarter of whose 45.5 million GSM line expansion tender is reserved for offering 3G services, has been advised by Telecom Minister A.Raja to drop the third generation component citing lack of policy for such a service.

Implications of following the advice include reconsidering the disqualification of US equipment supplier Motorola and Chinese partner ZTE from the bidding process on the grounds that they lacked expertise in 3G networks.

"The BSNL board has to convene a meeting... I am telling them, at least go for 2G and not for 3G, since the 3G policy is at present not in existence," Raja told PTI.

Earlier in the day, the top brass of BSNL met Raja to discuss the issue, which has become a major irritant in the public sector company's plan to expand capacity.

BSNL had selected Sweden's Ericsson and Finland's Nokia for executing the contracts. Raja is also believed to have questioned BSNL over the selection and evaluation criteria adopted by the PSU for zeroing in on Ericsson and disqualifying Motorola.

Motorola had taken BSNL to the Delhi High Court over the move, but it later dropped the case.

Raja, who also met representatives of BSNL employees union, said they assured him of not going ahead with their proposed July 11 strike against the delay in award of contracts.

BSNL employees had earlier contended that the public sector firm was losing market share owing to the delay in awarding contracts for adding capacity.

"They have told me they will not strike work... but you have to ask them," Raja said.

Although union officials were not available to comment on the minister's statement, sources said their talks with minister had failed and they would go ahead with the planned strike.

In fact, in Bhopal as per plan, the BSNL workers have already started their protest against the delay in awarding contract.

Official sources said Raja believes that the rates quoted by lowest bidder Ericsson were too high and could cost the PSU an extra Rs 12,000 crore.

Raja's contention was that MTNL gets 2G and 3G equipment from Motorola for $69 a line while the L-1 in the BSNL case has quoted $107. The deal was finalised during the tenure of Raja's predecessor - Dayanidhi Maran.

Depending upon the BSNL Board's decision, it appears now that financial re-bidding could start soon, and discussions would be held with all five bidders to finalise technical specifications.

When BSNL floated a tender, five firms Ericsson, Motorola, Nokia, Siemens and ZTE participated.
"It is surprising that Motorola, one of the leaders in the world in telecommunication equipment and a firm that supplies 2G and 3G equipment to MTNL, could not qualify technically," Raja is believed to have written to BSNL. — PTI

New Delhi, July 9
Vodafone CEO Arun Sarin today said he has “great respect” for India’s transparent and efficient regulatory mechanism, although he had on Saturday sought greater openness in the process for approving mergers and acquisitions.

However, Sarin, who had engineered the takeover of mobile operator Hutch-Essar, maintained that certain “vested interests” tried to the scuttle the deal.

“We have great respect for the role of Indian authorities in scrutinising transactions such as ours, in accordance with Indian law. We have also publicly expressed our appreciation for the speed and thoroughness with which scrutiny of the transaction took place by various authorities in India,” he said in a statement released here.

The statement came two days after the India-born chief executive of the British firm said at an IIT alumni event in Santa Clara, US, that unsuccessful rival bidders tried to derail the deal and sought greater transparency from government authorities.

“My remarks to the pan-IIT alumni about the process were directed at attempts by vested interests to derail the approvals procedure. In fact, the Vodafone experience highlights that the changing India of today has an efficient, effective and transparent process,” he said in the statement.

Sarin had Saturday said some big business houses were attempting to crater the deal. “The billionaire losers’ club was trying to unwind the deal,” Sarin, an IIT-Kharagpur alumnus, had said at the Global IIT conference.

“I have to tell you, I quite didn’t expect that. I didn’t expect the good and great of India to be calling cabinet secretaries, ministers, to say, ‘You have to unwind this deal, because frankly we want a piece of it,” Sarin had said.

Vodafone completed the acquisition of controlling stake in Hutch-Essar from Hong Kong-based Hutchison Telecom International Ltd for $10.9 billion in May this year.

Reliance Communications, Malaysia’s Maxis and UK-based Hinduja group were among those in the race to buy Hutch-Essar, but Vodafone clinched the deal in February. However, the UK-based company had to wait three more months for regulatory approvals to complete the purchase.

Sarin had also said it took Vodafore three months to get approvals, “certainly fast by the US and UK standards. In the US, it would take six to eight months to get approvals for such a large deal.”

“When you go back, and I certainly hope you go back, you will be aware of the other forces that exist and will fight those forces and make the country more transparent...India needs transparency, capital and infrastructure and you can supply those,” he said. — PTI

Mumbai, July 9
Even as Sensex crossed the 15,000 mark today and stayed put, global research firm Citi Investment Research today said that the benchmark index, Sensex, was likely to hit the 16,000 mark by December this year, with a robust growth in revenue of the corporate India.

“We are positive on Indian equities over the next six to 12 months and expect the growth to remain robust. We have a target of 16,000 for December and 17,500-18,400 for December 2008,” Citi India head Ratnesh Kumar said in its latest report.

Sensex touched the intra-day high of 15,000 on Friday last.

In the first half of the year, the market had lagged its regional peers due to jitters which were caused by inflation, rate hikes, tightening liquidity and currency appreciation, even though it bounced back from March lows and is up by 7.8 per cent so far in 2007.

“But the worst is over on these concerns now. We also expect the central bank to take fewer market dampening actions over the next six to 12 months,” Kumar said.

The inflow of funds has brought a significant rise and foreign institutional investors have already brought $1.81 billion this month, compared to $4 billion in the first half of the year, he added.

However, the research firm cautioned that this year growth in the stock market would be less spectacular than recent years.

“We expect top-line growth to remain in double digits due to rapid economic growth and niche export sectors,” Kumar said.

The Citi forecast the Sensex ex-oil earnings growth to be around 16 per cent over FY08 and FY09. For the June 2007 quarter, however, the firm expected a 25 per cent growth in Sensex ex-oil profits, the report said.

Elaborating on the reasons why the earnings growth would not be that impressive, the report said limited levers for margin expansion were likely to be present in later years as cost inflation kicks in, like wage and property rental prices.

Also, the credit growth was likely to be moderate and consequently the demand that the industry was seeing for the last few years would be eased.

However, Citi still predicted marginal improvement possibilities in telecom, media and upstream oil and gas.

Besides, sharp appreciation of the rupee, which had become a major challenge for the outsourcing industry in the last couple of quarters was not likely to impact the competitive positioning of companies significantly, except for those involved in lower-margin outsourcing like textiles and the BPO, the report added. — PTI

Mumbai, July 9
India’s largest private lender, ICICI Bank, today joined the likes of Reliance Communications, Infosys and Tata Consultancy Services in the Rs 1-trillion market valuation club.

ICICI bank has become the eighth company on the bourses to cross the Rs 1,00,000 crore mark on the back of recent listing of its fresh 5.81 crore equity shares on the bourses.

Reliance Industries, Reliance Communications, ONGC, Bharti Airtel, NTPC, Infosys and TCS and have already crossed the milestone.

The bank’s market capitalisation was at Rs 1,03,003.37 crore when its share price was trading at Rs 970.75 down by 1.13 per cent on the BSE in the afternoon trade.

The scrip today surged to an intra-day high of Rs 985 on the exchange and a total of 6.87 lakh shares of ICICI bank were traded by the afternoon session.

ICICI bank regained the eighth position in terms of the market cap, which it had lost briefly to realty major, DLF, after its recent listing on the bourses.

The DLF has slipped to the eighth rank with a market cap of about Rs 97,359 crore, with its shares being traded at Rs 576 in the morning session at the BSE.

ICICI had raised over Rs 5,400 crore in a follow-on public offer which had received a robust investor response by getting subscribed 11.50 times. — PTI

Mumbai, July 9
Hinting at the huge number of non-serious companies that are listed on the Bombay Stock Exchange (BSE), Securities and Exchange Board of India (SEBI) Chairman M. Damodaran today advised the BSE to undertake cleaning up of such companies.

“The companies, which have lost their interest in business, are still listed and they should not have place on the bourses,” warned the SEBI chief.

Speaking on the 133rd foundation day of the BSE, Damodaran complimented the BSE for completing its ‘Demutualisation’ process recently, and said that it was not an end of the things, but a beginning towards a long journey accompanied by several challenges.Taking a cue from the BSE Sensex surpassing an all time high of 15,000 points to close at 15,045 points, Damodaran advised the country’s premier bourse not to get excited with the numbers story and try to deliver better to the investors.

“Leave the numbers to tell their own story and be clearly firm on the theme, this is the exchange of future,” Damodaran said.

Damodaran said that the BSE should look at its immediate competitor, the National Stock Exchange (NSE), for the phenomenal growth it had achieved in a short span.

The BSE, which had over six thousand listed companies, and of them only three thousand companies are actively traded.

The Bombay Stock Exchange (BSE) today launched a new index, BSE Realty Index, and Indian Journal of Capital Market (ICJM) on the occasion of its 133rd foundation day.

On the very first day of its launch, the BSE Realty index was valued at 7,333.97, the BSE said. — UNI

New Delhi, July 9
Mukesh Ambani's Reliance Group is understood to be interested in acquiring pharmaceutical firm Cipla as part of its expansion in the life sciences space.

Group company Reliance Life Sciences (RLS) is believed to be negotiating a deal but officials of both the companies have dubbed these reports as "speculation".

"It is totally baseless," Cipla Joint Managing Director Amar Lulla said when asked about the matter.

Yet, industry sources said negotiations between the two parties were in a fairly advanced stage and the possibility of making an announcement in the next few weeks could not be ruled out.

RLS had announced its intention to get into generics space and planned to invest about Rs 1,000 crore on expanding capacities and foray into contract manufacturing.

It had outlined inorganic as one of the paths for growth and earlier this year picked up 74 per cent stake in UK-based biotech firm GeneMedix. — PTI 

New Delhi, July 9
Calling overseas may come down further with the state-run MTNL planning to launch ‘VoIP’ or Voice over Internet Protocol services, where call tariffs could be as low as Re 1 per minute.

The VoIP, which would be launched this month, would be able to offer cheap calling rates to overseas destination.

It could be like ‘One India rates’ where domestic call charges would be Re 1 per minute, sources said.

The BSNL is already offering ISD call rates to the US and Canada at Rs 1.75 per minute.

Although the PSU officials did not disclose the countries where these call rates would apply, they said it could be mainly those places where there was a sizeable Indian population.

VoIP is the technology used to transmit voice conversations over a data network using the Internet protocol.

It is inexpensive, as low as a local call as compared to an ILD or STD call. What is also a determining factor is voice quality. The VoIP voice quality of certain service providers (like Skype or Google) is claimed to be as good as or better than the telecom service providers’ offerings.

While PC-to-PC interface is not disallowed, PC-to-telephone/mobile handset is still not legal. But Illegal or not, VoIP is taking its root in India.

For a VoIP user, a personal computer and a broadband connection is a necessity.

The technology’s growing momentum is pushing telecom service providers like MTNL to offer international long-distance calls.

The MTNL is in fact trying to shore up its fixed line business through new services like IPTV and VoIP.

Sources said this year the PSU is expected to show up about 1 lakh positive gross fixed line connections in this fiscal, which had a strong demand of its vanilla fixed line service, broadband connections. — PTI

New Delhi, July 9
India, the world’s second largest sugar producer, should have an independent regulator for the industry for centralised implementation of various regulatory provisions, a report said.

There should be alignment of cane and sugar prices across the country using a structured formula and continuation of command area for cane supply, a report prepared by KPMG, a leading global consultancy firm, said.

The report “Indian Sugar Industry - Sector Roadmap 2017” said complete deregulation would expose farmers, millers and consumers to significant risks including risk of sugarcane off take, sugarcane availability and sugar availability. Such a scenario in the current context will lead sub-optimal growth of the sector.

It said that the minimum distance seperation between mills should account for regional variations with a national minimum benchmark of 25 km. The study called for the creation of a strategic stock of sugar that would enable the government to intervene as a market participant rather than through the monthly release mechanism.

Arvind Mahajan, executive director of KPMG advisory services, told reporters that the Centre should explore making suitable modification to the Essential Commodities Act, in order to implement the cane pricing regulatory modifications by denining a fair price for cane in addition to a minimum price.