Unitech opposes Telenor's rights issue proposal - Indian partner says Rs 1,200-crore offer would violate FDI cap, Norwegian firm terms it distortion of facts
(July 26 , 2012)
The battle between the estranged partners of Unitech Wireless — Telenor and Unitech — has resurfaced, with the Indian real estate giant opposing the Norwegian telecom firm’s Rs 1,200-crore rights issue proposal. In a letter to the Foreign Investment Promotion Board (FIPB) on Tuesday, Unitech has also accused its partner of misinterpreting facts discussed in the joint venture company’s board meetings.
Unitech has also raised questions as to how Telenor would bring in Rs 1,200 crore through a rights issue without breaching the 74 per cent FDI cap in the sector, as the real estate giant has already informed it would not subscribe to the issue.
The move comes a few days before the FIPB would consider the proposal of Uninor to raise Rs 1,200 crore through a rights issue to finance future investments in the country. Telenor holds 67 per cent equity stake in Unitech Wireless, the company that operates 2G services under the Uninor brand name, while the remaining is held by Unitech.
FEB 2008: Unitech Wireless issued pan-India licence to operate mobile services in 22 circles
Unitech says the reason for the arbitration was that Telenor breached the hierarchy of funding, under which project finance funding would come first and was available through State Bank of India and funding by a rights issue would be an option. It says Telenor did not take the option of getting the expansion funded through financing from State Bank of India.
“It is unfortunate to note the misrepresentations being made with reference to the FIPB process initiated by Uninor. With the relevant authorities, Uninor will meet these distortions point by point, with facts. Telenor Group remains committed towards its operations in India and will continue to pursue every measure available to safeguard their future,” Telenor said in a statement.
Unitech has also raised questions on the company’s Managing Director Sigve Brekke in separate communications and in the board, saying his request for a security clearance (a mandatory condition for FIPB endorsement) is tantamount to a breach in conditions, as he still heads the operation. It has raised a question if there is an overlap in Brekke’s role as part of the Telenor top management in India and Pakistan, which is not allowed under FIPB conditions. A Telenor spokesperson, however, said, “Mr Brekke has never been employed in Telenor Pakistan. He held a non-executive position on the board of that company, from which too he resigned a full year before taking up the Uninor MD’s position.” The spokesperson added Brekke had applied for extension of his security clearance well in advance and procedural delays in such an extension were not uncommon.
Uninor to scale down operations amid policy uncertainity
(July 24 , 2012)
MUMBAI: Norwegian telecom player Telenor's India unit will scale down operations in Tamil Nadu, Kerala, Karnataka and Orissa due to the continuing uncertainty around the 2G auction policy and timing, the telco said in a statement on Tuesday. Unitech Wireless, a joint venture between Telenor and Indian real estate major Unitech, is embroiled in the aftermath of the Supreme Court order cancelling 122 mobile permits in February this year.
These permits were scrapped by the apex court in the backdrop of the investigations being done in the multi-billion dollar 2G spectrum sale scam. Earlier, Etisalat, S Tel and Loop Mobile (except Mumbai) shut their operations post the court order starting the consolidation drive in a sluggish telecom market. Uninor said it will stop acquiring new customers in the four circles, which has 6.8 million subscribers, post which it will issue a public notice announcing a gradual scale down of network over a period of time. A company executive said that the network and commercial scale down is a fallout of the delayed decision making over the rules of the 2G spectrum re-auction.
Uninor has a total of around 400 direct employees in these four circles and it will evaluate possibilities of relocating some of the employees to other Uninor circles, the company statement said. The company will utilize the funds and equipments in the 9 circles after the scaling down of operations in the four circles.
4 global telecom vendors exit manufacturers’ body
(July 23 , 2012)
The Telecom Equipment Manufacturers Association (TEMA) has split down the middle with four big multinational vendors exiting the industry body. Ericsson, Nokia Siemens, Alcatel Lucent and Qualcomm have quit the association on grounds that they were not being consulted before firming up views on key policy issues.
“TEMA is coming out with media statements and writing letters to senior government officials on subject such as manufacturing, green telecom for which TEMA secretariat have neither contacted us nor have they based their statements on actual facts. It is also surprising that the secretariat did not share any of these communications with us before making it public,” the four companies said in a joint letter to TEMA.
While Ericsson, Nokia Siemens and Alcatel Lucent account for much of the network equipment market, Qualcomm has a significant presence in the mobile chipset segment. The primary cause for the split is the proposed telecom manufacturing policy wherein TEMA has taken a position in favour of domestic players. The policy, when implemented, will make it compulsory for telecom companies to buy a certain percentage of their requirements from local manufacturers. Foreign companies are opposing this policy on grounds that it violates WTO norms.
The four companies have told TEMA to immediately remove their logos and names from the association’s Web site and all documents and papers within 15 days. They have threatened to take legal action if TEMA does not comply.
When contacted, Mr Ashok Agarwal, Director-General, TEMA, said that the exit by the four MNC firms will have no impact on the industry body. “TEMA’s mandate is to push for policies that encourage domestic manufacturing and it is for individual members to decide whether they want to associate with this vision or not,” Mr Agarwal said.
Videocon, Huawei initiate legal action in supply row - Videocon seeks $180 mn in damages Chinese firm claims $150 mn in dues
(July 23 , 2012)
Videocon has slapped a legal notice on Chinese telecom equipment giant Huawei Technologies, seeking $180 million (about Rs 992 crore) in damages for providing faulty equipment and poor network services.
The move comes even as Huawei says it has sent a legal notice to the Indian consumer electronics to gas and mobile services company for $150 million (about Rs 827 crore) of unpaid dues. Videocon Chairman Venugopal Dhoot confirmed the development and said, “Yes, we have sent a legal notice of $180 million to Huawei for providing us poor network services and equipment.”
Huawei hit back, denying the allegations of having provided poor equipment and services. It confirmed having initiated legal proceedings against the Indian company. “Huawei completely denies all the allegations, including the one related to any kind of faulty supply of equipment or services. It is just an excuse and an after-thought that Videocon seems to have been raising to justify its inability to pay our legitimate overdue payments,” said the legal spokesperson of the company.
“We have full faith in the Indian judicial system, as we have already initiated appropriate legal proceedings in this regard against Videocon,” it added.
Videocon, which bought a majority equity stake in the Mahendra Nahata-promoted Datacom (one of the new players that won a 2G licence), had its licence cancelled by a Supreme Court order. However, unlike most other players such as Etisalat DB or STel, it has continued to provide services and increase its subscriber base even after the court decision. Videocon had entered into an agreement with Huawei for equipment and managed services in three telecom circles of Punjab, Himachal Pradesh and Uttar Pradesh (west) in 2009, according to Huawei. The Chinese equipment giant has been an aggressive player in the market and had also signed contracts with other new players such as Sistema Shyam, Etisalat DB, Loop and STel.
With 6.2 million subscribers, Videocon has 0.92 per cent market share in the GSM space. In May, the company saw its highest growth. It saw subscriber numbers grow 2.17 per cent, just behind Uninor. The company has a reasonable presence in markets such as Tamil Nadu, Haryana, Gujarat and Madhya Pradesh.
Electronics policy roll-out could bring $1 bn investment
(July 15 , 2012)
Demand for mobile handsets in India expected to grow at 10-12% per annum, to touch 280 mn units by 2015
The clearance of the proposed National Policy on Electronics (NPE) is expected to bring in investments of around $1 billion in the mobile phone segment during the next three years.
"We estimate that investment of $750 million to $1 billion (into the country) can happen quickly to either start new production facilities or to expand existing plants on implementation of the proposed NPE," Indian Cellular Association President Pankaj Mohindroo told PTI.
He said "the final version of the NPE along with the formal approval schemes like Electronic Development Fund and a robust incentive policy for encouraging exports of electronics would have to be in place" before investments proposals start crystallising.
According to ICA, the demand for mobile handsets in the country is expected to grow at the rate of 10 to 12% per annum and will touch 280 million units by 2015.
"These demands can be met by producing handsets locally. The scale of manufacturing would require a stable taxation regime and other related fiscal and non-fiscal incentives both from the Union and State Governments," Mohindroo said.
Government within a fortnight has already announced two schemes to boost electronics manufacturing ecosystem in the country which is largely dominated by imports.
Electronics industry body ELCINA estimates the current size of electronics industry at present to be around $70 billion out of which around $40 billion of the requirement is met through imports.
The NPE draft forecasts such imports to touch a humongous $300 billion by 2020.
The Cabinet last week approved Modified Special Incentive Package Scheme under which the government will provide up to Rs 10,000 crore benefits to the industry over period of 10 years for promoting production of electronics products and components in India.
However, the scheme is open only for three years by when electronics manufacturing related projects can get approval under this scheme.
Early this month, the government had approved the Electronics Manufacturing Cluster scheme that will provide financial support of up to Rs 50 crore for setting up a cluster which will house the eco-system required for manufacturing specific kinds of devices.
According to IT minister Kapil Sibal, the proposed NPE should come up for decision in next Cabinet meeting.
The NPE has proposed steps to facilitate a turnover of around $400 billion in the domestic electronic industry within the next 8 years and aims to meet the requirement of the industry through indigenous production.
Review: Google's Nexus 7 guns for the Kindle
(July 6 , 2012)
In this Friday, June 29, 2012, photo, the Google Nexus 7 tablet is shown, Friday, June 29, 2012 in New York. The Nexus 7 costs $199, the same that Amazon and Barnes & Noble charge for their tablet. Google is taking pre-orders for delivery in mid-July. (AP Photo/Mark Lennihan)
In the 1982 sci-fi movie "Blade Runner," there are hints that the hero, played by Harrison Ford, is an artificial human — an "android" or "replicant." His job is to go out and kill other, rogue androids.
If he's an android, he's of the latest model, Nexus 7. That's also the name Google Inc. has picked for the first tablet to bear the Google brand. Clearly, its mission is to go out and kill rogue tablets running Google's Android software.
Specifically, the Nexus 7 seems to have been designed to give anyone who bought a Kindle Fire from Amazon.com Inc. or a Nook Tablet from Barnes & Noble Inc. a lethal case of buyer's remorse.
In this Wednesday, June 27, 2012 file photo, Google's Cheryl Pon shows off apps on the new Google Nexus 7 tablet at the Google I/O conference in San Francisco. The Nexus 7 costs $199, the same that Amazon and Barnes & Noble charge for their tablet. Google is taking pre-orders for delivery in mid-July.(AP Photo/Paul Sakuma)
It's succeeded. As far as I can tell from my few days of use so far, the Nexus 7 is a really good value. It's made by AsusTek Computer, a Taiwanese company that was originally planning to sell a similar tablet for $249.
The screen has a higher resolution than the Fire, and colors look more vivid. The whole tablet is slightly thinner and appreciably lighter than the Fire.
Other nifty but invisible hardware upgrades on the Nexus 7 include Bluetooth and GPS chips for use with headsets and navigation software. The tablet even has a chip for near-field communications, which means it can "talk" to some phones and store payment terminals when tapped against them. I used the Nexus 7 to pay for toilet paper in a drugstore.
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
RBI approves proposal to allow mobile phone companies mortgage airwaves
(June 12 , 2012)
NEW DELHI: The Reserve Bank of India has approved the proposal to allow mobile phone companies to mortgage airwaves, a move that will allow telcos to use spectrum as collateral and raise funds from banks for the upcoming auctions.
The RBI has said that banks will be allowed to seize airwaves in the event of a default or cancellation of mobile permits. Banks will enjoy the rights to sell, transfer, assign, exchange and dispose the airwaves without any restraining conditions to protect their interests, the Central Bank said in May 30 communication to the finance ministry.
The finance ministry has endorsed the RBI stance and has asked the telecom department (DoT) to expedite policy changes to allow spectrum to be used as collateral by lenders of telecom companies, saying this will 'boost the confidence' of banks and allow mobile phone companies to raise loans.
The RBI nod is significant, as the Supreme Court has set an August 31 deadline to complete the spectrum auction.
Telcos had warned that they would be unable to pay the minimum price prescribed by sector regulator Trai as banks had stopped lending to telecom companies after the 2G spectrum scam that resulted in the Supreme Court quashing 122 mobile permits issues by former telecoms minister A Raja.
Trai had recommended that the reserve price for each unit of airwaves in the 1800 MHz band be set at Rs 3622 crore in the upcoming sale.
The total debt of the telecom industry is estimated at Rs 275,000 crore.
The Central Bank's approval to treat 'spectrum as tangible security' endorses telecom regulator Trai's recent recommendation that mobile operators be allowed 'to mortgage airwaves they hold to raise funds from financial institutions'.
Trai had said that in the event of default, lenders would be allowed to sell the airwaves under the telecom department supervision and added that proceeds in excess of the liability would have to be remitted to the government. But the RBI has sought that 'no restraining conditions' be imposed on lenders when they transfer, sell or exchange airwaves.
The telecom commission, the highest decision making body of the DoT has given an in-principle approval to Trai's suggestion, while also deciding to seek the law ministry's and the RBI's opinion on this issue.
A DoT official said that the Empowered Group of Ministers on spectrum auction, headed by fiance minister Pranab Mukherjee may consider the RBI's stance and approve the policy change permitting spectrum mortgage, in its next meeting later this month.
RCom deal: Alcatel, Ericsson front runners. The Rs 8,000-cr deal is expected to be finalised early next month.
(June 11 , 2012)
Global telecom companies Alcatel-Lucent SA and Ericsson have emerged as front runners for Reliance Communications Ltd (RCom)’s Rs 8,000-crore long-term outsourcing contract.
The deal, to be awarded to a single operator, was expected to be finalised early next month and the talks were in the final stages, said people aware of the development.
Other leading international telecom equipment makers, including Nokia Siemens Network, Huawei Technology Co Ltd and ZTe Corp, had also bid for one of the largest managed services contract in the past few years.
As part of its offer, the new contract would cover the entire range of RCom’s telecom services — wireless, wire-line, and utilities — on an end-to-end basis across the country. This is different from managed service contracts deals signed by other telecom companies, where the deals would be restricted only to the company’s wireless operations.
The deal would entail outsourcing end-to-end management services, including operational planning of the network (which most companies keep to themselves), management and maintenance of GSM, CDMA and wireline networks, fibre, utilities, internet protocol and field assurance (quality control).
Only information technology (IT) services and customer services will be kept out of the contract. Decisions on new roll-outs will remain in-house.
Those in the know say the deal could entail the transfer of a substantial part of the 15,000 employees of RCom to the vendor that wins the contract. Discussions are said to be on to fix the number.
An RCom spokesperson, when contacted on the issue, said: “The constant criterion for Reliance Communications in its choice of vendors and business partners is to further improve the productivity and efficiency of its network, as well as the user experience for its customers.”
The integrated outsourcing contract will help RCom, which has debts to the tune of Rs 36,000 crore, reduce its cost by 15-20 per cent, say experts. Discussions are on with the shortlisted vendors to provide site-wise (tower-wise) network performance rather than the current overall network performance parametres. That should improve quality standards.
The managed services model was pioneered in India by Bharti Airtel Ltd, which has signed long-term contracts with Ericsson, Nokia Siemens Network and Huawei for 2G and 3G services. Bharti also has an outsourcing deal with International Business Machines Corp for comprehensive IT solutions for a few years. Vodafone India has two vendors, Ericsson and Nokia Siemens Networks, with which it has long-term managed service contracts.
Currently, RCom has a 50:50 joint venture (JV) with Alcatel-Lucent, which was announced in 2008 for managed services. However, the domain for which the two vendors have been shortlisted would be much larger than the Alcatel-Lucent JV. RCom will pull out of the JV if its Alcatel-Lucent is not selected for the new deal. RCom has decided not to go for a JV model with the selected outsourcing partner.
BaTboT is up for imitating smart bat maneuvers
(June 3 , 2012)
Robotics researchers in Spain and the U.S. are studying bats for their design work on drones. Bat wings are highly articulated, with skeletons similar to those of human arms and hands. The researchers have built a drone that mimics the way a bat changes its wing shape in flight. Bats achieve an “amazing” level of maneuverability, says a researcher, mainly because of their capacity of changing wing morphology during flight. Specifically, the "Batbot" replicates the way a bat changes the profile of its wing between the downstroke and upstroke. By folding wings toward their bodies on the upstroke, bats use 35 percent less energy and reduce aerodynamic drag, according to researchers at Brown.
The design is said to be encouraging, as an example of how robot construction can move from rigid components toward bionic systems made from softer materials and artificial muscles.
The interest in bats is because of the way bats change the shape of their wings, which has potential for improving the maneuverability of these air devices. Julian Colorado and colleagues at the Polytechnic University of Madrid, Spain and at Brown University in Providence, Rhode Island, built the drone with an end goal in mind—more agile, autonomous robots making more agile moves than can fixed wing aircraft.
The device’s wingspan was inspired by a specific type of bat, the grey-headed flying fox, the largest bat in Australia.
Transparent phone display has front-and-back touch
(June 1 , 2012)
Japanese wireless carrier NTT DoCoMo and Fujitsu attracted attention at this week’s 2012 Wireless Japan expo, with their transparent, dual-sided smartphone touchscreen. This is a see through 2.4-inch display prototype with touch sensors on both the front and flip sides. The demo showed how the user’s hand can go behind the icons on the screen to use touch, while the full display on the front remains unobstructed. With this display, the user can deploy touch on the front, back, and sides or just on the front panel or just the back or sides, or touch both screens at once, depending on desired actions.
Showcasing all the multi-touch maneuvers, the demo highlight was in working out a Rubik’s Cube on the display. Tapping the puzzle image front and back produced various results. The cube was made to spin and move its parts via different gestures.
“You could hold down an icon on the front, and slide on the back to move an icon, or use the message bar, or create a new application. For example, from the front, you can only move the whole Rubik cube like this, but if you slide your finger across the front while holding down the back, you can rotate just one face. So this display makes gripping operations possible."
The creators of the screen would be the first to admit, however, that their transparent, two-sided, concept is not fully baked. One downside is limited visibility in sunlight. The transparent touchscreen as is would be difficult to use in the bright outdoors. Also, the prototype shown at the expo featured a 2.4-inch OLED screen (320x240) and used an unidentified version of Android. The NTT DoCoMo spokesperson recognized that the 2.4-inch QVGA display is “quite small.” He said, “We think it needs to be bigger if we're to market this kind of phone.” In its present form, he said that it could be used as a sub-display. “In that case, it will have a limited display capability, so we think the range of applications could be wider."