Mobile, WiFi and Landline Telecommunication in India

If taxes and loan repayments are cut, why not telecom?

Feb 20, 2020 6:00 AM

Banks take a 50-60% haircut on loans & taxman cuts its demands to settle cases; do the same in telecom sector



The Supreme Court’s (SC) AGR verdict that was supposed to give the government a windfall of Rs 1.4 lakh crore from the telcos and another Rs 3+ lakh crore from non-telcos is rapidly turning into a nightmare. Asking PSUs, primarily, to pay Rs 3 lakh crore would have wiped out many of them, and the SC has given them a possible way out by staying their dues till Tdsat rules on this. And, with Vodafone Idea not able to pay the Rs 53,039 crore it owes, it is becoming clear that the government could be an even bigger loser; firms like RCom, which owes Rs 20,434 crore, are, in any case, not in a position to pay, nor is BSNL-MTNL, which owes Rs 8,112 crore.

The government is facing two types of losses, apart from the big hit that India’s image as an investment-friendly destination will take if a firm that has invested $55 bn shuts down primarily due to poor government policy. For one, Vodafone Idea owes the government Rs 1.6 lakh crore in deferred spectrum dues; once Vodafone Idea shuts, the government may or may not get the spectrum back—the issue is under litigation in another case—but, even if it does, it can never sell this at the valuation it did in the past. apart from this, Vodafone Idea owes banks, several of them PSUs, Rs 49,000 crore, and much of this will also need to be written off if the telco goes to the insolvency courts.

There were several solutions available to the government, from asking the SC that it be allowed to set a schedule for the payments (this ship has, since, sailed given how angry the SC was at the last hearing) to scrapping the licence fee and spectrum usage charges (SUC) since spectrum is being sold at market prices, unlike in the past. Also, given the spread of rural telephony, especially by the private sector, there is absolutely no justification for a 5% SUC/USO charge on telco revenues that is supposedly to be used for spreading rural telephony. Indeed, the government should put out the numbers on how much has been collected under the USO and how much has actually been used for rural telephony over the years; a large part of the latter has, as it happens, also been given to BSNL, ostensibly for rural operations, but for all practical purposes, it is just a PSU subsidy.

While the government is unable to come up with a quick solution due to the likelihood of it being tagged suit-boot-ki-sarkaar, it should keep in mind that it is making huge concessions in other areas anyway, but no one has alleged favouritism of any sort. The Vivad se Vishwas scheme offers huge cuts as the penalty and interest is completely waived off and, in many cases where the taxman has lost the case at one level of appeal, even the principal tax is to be cut by half. In the insolvency courts, government-owned banks have received just around 40% of their outstanding dues in the 12 largest default cases and, in several cases, the haircuts are even larger at around 85-90%. If the government can take such huge haircuts because it makes business sense to do so, why is the same not being done in the case of the telecom AGR dues?

Vodafone Idea shares rally over 50% in two days; here's why

Feb 20, 2020 10:04 AM


After rallying over 38 per cent on Wednesday, the scrip climbed another 12 per cent to Rs 4.71 in morning trade today.

Shares of Vodafone Idea extended their rally to the second straight session on Thursday after ET on Wednesday reported that the government is unlikely to invoke the company’s bank guarantees for now even as the officials of the telecom and finance ministries met Cabinet secretary Rajiv Gauba to discuss ways to ensure that the sector retains three private players.

After rallying over 38 per cent on Wednesday, the scrip climbed another 12 per cent to Rs 4.71 in morning trade today. Overall, the scrip has rallied more than 50 per cent over two days against the close of Rs 3.03 on Tuesday.

“First round of meetings happened on Tuesday… The government could consider postponing or staggering other payments due to it, in order to give some flexibility to telcos to cough up money towards AGR (adjusted gross revenue) dues,” ET said quoting an official. “These are just very initial discussions.”

In another development, Vodafone Idea Chairman Kumar Mangalam Birla on Tuesday also met Telecom Secretary Anshu Prakash as he looked for options to keep the company afloat.

After the meeting, Birla said he “cannot say anything at the moment.”

Former finance secretary Subhash Chandra Garg on Wednesday said the government should offer a one-time settlement scheme to the telecom companies to pay the principal amount due as per the AGR definition and waive the penal interest and penalties.

The massive Rs 1.47 lakh crore of adjusted gross revenue (AGR) dues are pushing telecom firms to the brink.

The Supreme Court last week rejected a plea by telecom firms including Bharti Airtel and Vodafone Idea Ltd for extension in the payment schedule and asked them to deposit an estimated Rs 1.47 lakh crore in past dues for spectrum and licenses by March 17.

On the other hand, shares of Bharti Airtel were up 0.30 per cent at Rs 545. Bharti Airtel on Monday paid Rs 10,000 crore to the government and said it would pay the balance dues as per its self estimates before March 17.

Vodafone Idea paid Rs 2,500 crore on Monday and said it will pay another Rs 1,000 crore by Friday. While the government has estimated Vodafone Idea’s AGR dues at Rs 57,000 crore, the telco’s own estimates peg the amount at around Rs 23,000 crore.

Airtel, Vodafone and Jio come out in protest against this tariff plan published by TRAI

Feb 19, 2020 7:36 PM


Telecom giant Airtel, Vodafone-Idea and Reliance Jio have opposed publishing TRAI's user-specific tariff plan. All three companies do not want to display the authority's user-specific tariff plan on their website. Companies say that there will be confusion among its users and users will complain to the telecom companies with the authority. Airtel and Vodafone-Idea have already introduced many user-specific offers to their users to keep up with the network. Reliance Jio has launched very few user-specific plans. Jio has launched promotional offers for its users in place of user-specific plans. Now, all three telecom companies are opposing this policy of TRAI. Let's know in full detail

TRAI has been advising telecom companies to keep transparency about their tariff plans since the beginning. The authority asked the telecom companies to publish all their plans on the website. Whether those plans are promotional or any user specific. Reliance Jio wrote a letter to TRAI that in this way, publishing a user-specific offer on the website can create confusion among users. Due to which the number of complaints against the telecom company can increase. Users may like plans that are not available to them. They can complain to the authority.

Bharti Airtel has also opposed TRAI to publish such a user-specific plan. Vodafone-Idea also supported Reliance Jio and Airtel in this case, saying that due to expired offers, resentment may arise among users. However, what the authority says in this matter, we will come to know about it in the coming few weeks.


Cheap Telecom services are going to end soon.
Indian Economy, slowdown and other problems can eat away Telecom Sector with all linked sectors and employment too.

How Will Infratel-Indus Merger Deal Help Vodafone Idea?

Feb 22, 2020 12:47 PM

The Department of Telecom (DoT) has cleared the merger of telecom tower companies Bharti Infratel and Indus Towers on Friday, an Economic Times report citing sources said. The companies are believed to have received the foreign direct investment (FDI) the key to a merger that was delayed for several months.


How will the deal benefit Vodafone Idea?

Indus Towers is a joint venture between Bharti Infratel (42%), UK-based Vodafone Group Plc (42%), Vodafone Idea (11.15%) and US-based private equity firm Providence (4.85%). Bharti Infratel is a subsidiary of Bharti Airtel.

It is expected that after the merger, Vodafone Idea will be able to monetise its 11.15% stake to pay its DoT dues. The stake is estimated to fetch the telecom operator Rs 4,500 crore

Vodafone Idea has been the worst hit by the Supreme Court's AGR (adjusted gross revenue) verdict. Its several efforts to gain relief on the statutory dues failed after the 24 October verdict.

According to DoT estimates, the company has to pay Rs 56,709.49 crore to the government as interest and principal on the dues. On Monday, it paid Rs 2,500 crore of the dues and another Rs 1,000 crore on Thursday.

Last week, after reporting a net loss of Rs 6,453 crore for the December ended quarter the telecom operator said it was facing difficulty raising capital as AGR dues caused credit rating agencies to downgrade its NCDs. On Monday, the company informed that Care Ratings Limited (CARE) has further downgraded ratings on Long Term Bank Facilities as well as NCDs of the company from BBB- to BB-, creating further obstacles in raising funds.

What is AGR?

AGR is DoT's measure to calculate levies payable by operators. Telcos argued that AGR should comprise revenue from telecom services, but DoT insisted that AGR should include all revenue earned by an operator, including that from non-core telecom operations. DoT's definition of AGR was upheld by the court, putting an end to a 14-year old legal battle.

The merger

The merger between Bharti Infratel and Indus Towers was announced back in April 2018, but the companies were awaiting DoT's approval.

Bharti Infratel's board had allowed two extensions of 2 months each- on 24 October and then on 24 December-to secure more time.

The merger would create the world's second-largest tower company as the combined entity will own more than 163,000 towers, second only to China Tower.

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BS Opinion | In the winner-loser debate, another question keeps coming up: Is there anything that can be done to save Vodafone Idea?

Nivedita Mookerji writes

Delhi-NCR में Airtel की 3G Services बंद, परेशान Customers Social Media पर निकाल रहे गुस्सा
•Feb 1, 2020


Amar Ujala
863K subscriberस
#Airtel #DelhiNCR #Airtel3GServices Airtel ने Delhi NCR में अपनी 3G Services को बंद कर दिया है। वहीं इस परेशानी के चलते Customers ने Social Media पर अपना गुस्सा निकला। देश और दुनिया की हर हलचल पर पैनी नजर। हमारी वेबसाइट पर जाने के लिए क्लिक करें- चैनल सब्सक्राइब करें- फेसबुक पेज लाइक करें- ट्विटर पर फॉलो करें- अमर उजाला का एप डाउनलोड करें-
Telecom infra firms ask BSNL to immediately clear ₹1,500 cr. dues for continued services

NEW DELHI, APRIL 10, 2020 17:37 IST
UPDATED: APRIL 10, 2020 17:37 IST

BSNL had recorded a loss of ₹14,904 crore in the previous financial year 2018-19.

BSNL had recorded a loss of ₹14,904 crore in the previous financial year 2018-19.

The non-payment, the firms said, so far has already resulted in mobile service outage at various places in the country

Telecom infrastructure companies have asked state-run firm BSNL to clear dues totalling ₹1,500 crore on urgent basis, saying they are unable to meet critical expenses necessary for maintaining the telco’s network.
Also read: DoT urged to have BSNL, MTNL clear vendor dues
The non-payment, the firms said, so far has already resulted in mobile service outage at various places in the country.

The group of eight infrastructure firm under the aegis of industry body Tower & infrastructure Providers Association (TAIPA) has written to BSNL Chairman and Managing Director P K Purwar on Thursday, seeking clearance of dues as they are facing problem in paying for electricity, diesel, batteries procurement, etc for maintaining the telecom PSU’s network which led to service outage in several areas.

“The situation has become highly critical now with total outstanding dues from BSNL amounting to approximately ₹1,500 crore which has been pending for long. We are looking forward to an urgent intervention and support from the CMD, BSNL in the matter,” TAIPA Director General T R Dua said in a statement.
He said that the telecom infrastructure companies are already facing financial woes and working hard to manage networks during the ongoing lockdown period.
A query sent to BSNL in this regard did not elicit any immediate response.
TAIPA has sought urgent intervention on behalf of Indus Towers Ltd, ATC Telecom Infrastructure Pvt Ltd, Bharti Infratel Ltd, Tower Vision Ltd, Sterlite Technologies Ltd, Space Telelink Ltd, Applied Solar Technologies and Coslight India Limited.
Out of the total, BSNL owes ₹606.4 crore to mobile tower firm ATC, ₹488 crore to broadband technology firm Sterlite Technologies, ₹127 crore to Indus Towers, ₹118.2 crore to Tower Vision and ₹100 crore to Bharti Infratel.
“There is an urgent need for intervention and support regarding clearance of outstanding dues of our (Infrastructure Providers category) IP — 1 members due to which our members are facing huge cash crunch,” Dua said.
TAIPA said that telecom infrastructure companies are facing problems in making payment of rentals to the landlords where BSNL sites are installed, payment of electricity bills of BSNL towers, procurement of diesel and batteries and other backup storage devices for telecom towers sites of BSNL.
It said that there are challenges in keeping the uptime as per service level agreements “for BSNL tower sites which is leading to BSNL network outage and blackouts in nearby areas of the sites.”
Telecom operators body COAI has also urged the telecom department on Wednesday to direct PSUs, including BSNL and MTNL, to clear ₹20,000 crore of cumulative outstanding dues of communications and network equipment manufacturers, infrastructure providers and other vendors.
The Cellular Operators’ Association of India (COAI), in a letter to the telecom secretary Anshu Prakash had flagged the distress felt by its member companies over outstanding dues from PSUs and said that non-payment of dues is “adding to critical financial woes to our members companies who are facing serious constraints in terms of cash flows due to slowing economic activities in the current situation“.
“Also, this huge scale of delays and breach of contract commitments by public sector units is highly detrimental to global business sentiment towards India,” the COAI had said.
Despite the relief package the losses of BSNL swelled by over 2.5 times to ₹39,089 crore during the April-December 2019 period.
Also read: Centre committed to revival of BSNL: Ravi Shankar Prasad
The public sector telecom firm had recorded a loss of ₹14,904 crore in the previous financial year 2018-19.
Around 78,000 BSNL employees have opted for the voluntary retirement scheme supported by the government in the relief package which has reduced salary burden on the company significantly.

Telecom infra firms ask BSNL to immediately clear ₹1,500 cr. dues for continued services
Man climbs tree to teach students during lockdown
By Rumela Sinha
April 20, 2020 21:34 IST

Subrata Pati, who is in Ahanda village in West Bengal's Bankura district, climbs atop a neem tree each day to receive uninterrupted signal on his cell phone, which he uses to teach his pupils with.

IMAGE: Subrata Pati atop the neem tree in his village of Ahanda teaching his students history. Photograph: PTI Photo
Prosperity is a great teacher, adversity even greater.

And adversity in times of the lockdown has brought out the best in Subrata Pati who, unlike most other professionals, isn't working from home.
Perched atop a neem tree in his village, the history teacher is giving lessons to his students in Kolkata on events of seminal importance that shaped civilisations and obliterated them, conquests by kings and generals, and horrors of war and pestilence in the coronavirus era.
'Numbers will stabilise around April 25'

Taking classes online is a battle Pati, who teaches at two educational institutes in Kolkata, is fighting from his native Ahanda village in West Bengal's Bankura district, where his cell phone screen blipped to life one moment and lay dead frozen the next.
Exasperated, just as he was about to give up, he was struck by the thought of climbing a tree to see if getting a few yards closer to sky made any difference. And it did.
Now, every morning, the 35-year-old man climbs up the neem tree next to his house and parks himself on a makeshift wooden platform tied to its branches and receives uninterrupted signals on his cell phone he uses to teach his pupils with.
Having set up the DIY (do-it-yourself) marvel with some help from his friends, the history teacher at Adamas University and RICE Education in the city doesn't find the chore tiring.
"I have temporarily shifted from my Kolkata residence to Ahanda, which is a part of the state's Jangalmalal area, to be with my family in the midst of the COVID-19 crisis. That done, I couldn't have shrugged off my responsibility as a teacher. The internet network here is mostly patchy, so I had to look for a solution," he said.
Pati takes food and water with him to the tree-top platform, made of bamboo, gunny sacks and hay, on days when he has to conduct two to three classes at a stretch.
"Sometimes the heat and the urge to pee bother me, but I am trying to adjust... sometimes storms and thundershower damage the platform, but I try and fix it the next day. Under no circumstances I would want my students to be inconvenienced," he said.
The attendance is usually high for his classes, said Pati with a broad smile.
"The students keep boosting my confidence. They have always been very supportive. They assured me that they would put in their best efforts to score well in my paper," he said.
Buddhadeb Maity, one of his students at RICE Education, said Pati was an inspiration for him.
"What he does for his students is exemplary. I never miss his classes, nor do my friends. In fact, he takes time out to answer our queries too. Attendance for his classes is usually 90 per cent," he said.
Asked how he chanced upon the idea of setting up the bamboo structure, Pati explained that villagers often build 'machan' (makeshift watchtower) on tree-tops during the harvest season to keep an eye on elephants straying into their fields.

"It is a common practice here. I sought help from some of my friends and together we set up the bamboo platform for my classes," he said.
Samit Ray, the chancellor of Adamas University, said the institute was proud of Pati.
"He has been very sincere about his work from the start. He is a shining example of how to surmount obstacles with hard work and willpower," he added.

Man climbs tree to teach students during lockdown