The Indian budget for 2008-09 was expected to rationalise the taxes and duties applicable on the telecom sector. But the industry is dissatisfied with the proposals.

Business paper Mint, has a sectoral analysis of telecom.

Proposals: Customs duty on project imports attracting 7.5% proposed to be reduced to 5%; Customs duty on specified raw materials and inputs for use in IT/electronic hardware industry proposed to be reduced from 10%/7.5% to Nil, on end-use basis; National Calamity Contingent duty (NCCD) at the rate of 1% proposed to be imposed on mobile phones. On imported mobile phones, this duty shall be levied as additional duty of customs;

Impact: In view of the low telephone penetration in India, reduction in customs duty on project imports and on specified raw materials and inputs for use in IT/electronic hardware industry likely to reduce per-line capital costs and make telecom services more affordable.

TechTree has a sectoral analysis of IT.

Excise duty on wireless datacards reduced from 16 percent to nil.

Increase in grant of Rs 180 crores to the Department of Information Technology, and allocation of funds to set up Broadband-enabled service centers in rural areas. Allocation of Rs 1,680 crore (from an earlier 1,500 crore) to the Department of Information Technology in 2008-09 while allocated funds to set up 100,000 Broadband Internet-enabled Common Service Centers in rural areas, State Wide Area Networks (SWAN), and for a new scheme for State Data Centers. Rs 75 crores wil be provided in the next financial year to the common service centers; Rs 450 crores have been allocated to SWAN, while Rs 275 crores have been granted for the State Data Centres.

Zero customs duty on Set-Top boxes

The finance minister also announced that specified parts of set-top boxes and specified raw materials for use in the IT/electronics hardware industry would be exempt from customs duty. This could mean a drop in prices of set-top boxes as well as TV, DVD players, etc. Add to it, customs duty on convergence products to be reduced from 10 percent to 5 percent.

Also Read: Telecom set for tax overhaul

Government

Speaking to IIT alumni in Silicon Valley, Vodafone chief executive Arun Sarin said his hopes that India’s regulatory bureaucracy had modernised were shaken by last-minute moves to derail his company’s $11-billion takeover of Hutchison Essar.

“I really did not expect people

Government

TRAI has decided to levy a fine of Rs 500 for every unsolicited call or SMS sent by a telemarketer. Further, the telemarketer could face disconnection of services.

The regulator has exempted messages relating to financial transactions under specific contracts (between the caller and a party), charities, national campaigns, natural calamities transmitted under government directions, among others.

TRAI, through this regulation, has also called for setting up a national database that contains a telephone numbers of subscribers who do not want to receive the telemarketing calls. TRAI has mandated National Informatics Centre (NIC) to set up a National Do Not Call (NDNC) registry in three months’ time.

Telecom service providers are required to set up the call centres with toll free telephone lines to which a subscriber can call to register his name and number.

Sources: Business Standard and TRAI

Government

High-profile Communication and IT Minister Dayananidhi Maran has resigned.

His resignation is a fallout of political turmoil after Dinakaran, a daily owned by the union minister’s elder brother Kalanidhi Maran, carried a survey that exposed chinks in the family of Tamil Nadu’s Chief Minister M Karunanidhi. Dayanidhi Maran is from Tamil Nadu’s ruling DMK party.

Lets hope this political drama does not effect the speed of India’s telecom growth.

Government

Vodafone cleared its last hurdle in acquiring a controlling stake in Hutch Essar with finance minister P Chidambaram giving his go-ahead on Friday. His approval comes within a week of the Foreign Investment Promotion Board giving its nod for the acquisition.

The approval comes as a welcome reprieve to Analjit Singh and Asim Ghosh, whose 12.26% shareholding in Hutch Essar has been under scrutiny since the deal was announced in February. RBI and some government officials were reported to have initially opined that stakes held by Mr Singh, Mr Ghosh amounted to violation of FDI/Fema norms and were

Government

The March 31 deadline for subscriber re-verification process is past.

DoT had strictly instructed operators to complete the re-verification by March 31. Failure of operators to verify would mean disconnection of the mobile numbers or the operator will face a penalty of Rs 1,000 for each unverified subscriber.

DoT took up the subscriber verification issue after it found out that most of the operators are offering mobile connections without proper documentation and verification. According to the license terms laid by the government, each operator must strictly carry out documentation and physical verification of the subscriber before offering a connection.

TV Ramachandran, director general, COAI, said that the verified status is encouraging but denied revealing the numbers.

However, sources in the industry informed that on the last day of the verification many subscriber accounts could freeze and the numbers could be more than 10 million. Most of the operators are mum on the re-verification status.

Re-verification helps in J&K:

Rattled by the discovery that militants had obtained cellphone SIM cards by faking identities of securitymen, telecom companies have temporarily barred services of over 10,000 subscribers in Kashmir and launched a massive re-verification exercise.

Reliance Communications has completed re-verification of 85 per cent of its entire wireless subscriber base. Its ARPU is expected to increase by 12 per cent as a result of the re-verification exercise, making it one of the top three players in India in terms of ARPU.

In accordance with DoT’s requirements, subscribers that could not be verified at the end of the stipulated period, despite efforts made by the company, have been deactivated. However, the company would continue its re-verification initiatives, and customers submitting the requisite complete documents would be re-activated within 48 hours, it said.

Sources: CIOL, Kashmir Live, ET

Government

The GSM Association (GSMA), the global trade association representing more than 700 mobile operators, presented its Government Leadership Award 2007 to India for exceptional achievement in the field of mobile communications policy.

India has been selected because of its success in establishing a framework of policies and regulations, which have enabled and stimulated the growth of mobile telecommunications over the past three years. The Government has transformed the policy and regulatory environment by:

  • relaxing rules on foreign direct investment (FDI)- raising the limit for foreign investment in a telecoms company from 49 per cent to 74 per cent
  • reducing the access deficit charges payable by mobile operators to the fixed line incumbents
  • liberalising the domestic and international long distance markets
  • facilitating the sharing of network infrastructure
  • simplifying and speeding the planning procedures for new cell sites
  • increasing the amount of commercially available spectrum and
  • securing spectrum for 3G in the IMT-2000 core band
  • stimulating telecommunications equipment manufacturing

The GSMA’s Government Leadership Award was given to Brazil in 2005 and to Pakistan in 2006.

Government

CIOL reports that the Indian Government is looking at asking post offices to validate the identification of the mobile subscriber, which can be used as an authentication system for the telecom service providers.

The post offices may charge about Rs 30 for every identification.

“The Department of Posts has been roped-in along with the Department of Telecommunications, both under the Ministry of IT and Communications, for identification and verification system for the end-users. As the postal department has a got wide-network and the postman or post-woman knows who lives where and for how long, and this itself is a good way of authenticating the veracity of a subscriber,

Government

Mobile number portability is on the horizon in India. The Department of Telecommunications (DoT) has set April, 2007 as the deadline for the implementation of mobile phone number portability.

The deadline had been recommended by the Telecom Regulatory Authority of India (Trai) and submitted to the DoT in March this year.

Telecom operators have opposed the move citing various reasons.

  • Implement number portability on fixed line services also
  • Doing it on a national scale involves investments to the tune of Rs 18,000 crores
  • A survey conducted by operator body COAI found that its not high on customer priority!

To enable operators recover their cost, Trai had suggested that subscribers porting their numbers be charged a one-time fee of Rs 200. This way the operators would be able to recover their investments in a period of three to five years. Trai had also suggested that number portability be implemented in a phased manner – first in the metros and category A circles, and then in the B and C category circles within a span of six months.

Before it changes the licence conditions to accommodate number portability, DoT will initiate a fresh round of discussions with mobile phone operators and may fine-tune some of the suggestions made by Trai.

Number portability allows mobile subscribers to switch operators without changing their numbers. It has already been implemented in Hong Kong, UK, Australia, US, Germany, France, Netherlands and Singapore.

Related: Your number forever?

Source: Indian Express

Government

Following a TDSAT directive, the Telecom Regulatory Authority of India (TRAI) has come out with recommendations on activities to be taken into account for calculation of an operators’ Adjusted Gross Revenue (AGR).

What is AGR?

Telecom operators calculate their revenue and pay revenue share to the government on the basis of AGR.

Activities of an operator included in AGR:

  • Sale of handsets or telecom equipment if bundled with telecom service
  • Interest calculated on refundable deposit from subscribers
  • Vendor’s credit
  • Revenue from rent of towers and dark fibers
  • Payment received on behalf of third parties
  • Receipt on account of Acess Deficit Charge
  • Discounts and rebates given to customers

Activities of an operator excluded from AGR:

  • Revenue from discernible and standalone sale of handsets or telecom equipment not bundled with telecom service
  • Income from dividend
  • Capital gains unless receipts have come from telecom activities
  • Gains from foreign exchange fluctuations and reversal of provisions

The industry has been given six weeks’ time to seek clarification on the issue.

Sources say the industry may seek clarification on areas like vendor’s credit and discounts given to customers, which were earlier waived from the calculation of AGR.

Government