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Wednesday, October 23, 2019
Reliance Jio crosses 300 million customers mark

Jio became the fastest company in the world to achieve 100 million telecom subscribers in 170 days of starting commercial operation. Telecom operator Reliance Jio has crossed the 300 million customers mark in two-and-a-half years of its operations, sources said. The milestone was reached on March 2, they added.

Queries sent to Jio on the matter remained unanswered.

Jio became the fastest company in the world to achieve 100 million telecom subscribers in 170 days of starting commercial operation. However, in its television commercials during the ongoing IPL season, Jio is shown ‘Celebrating 300 million users’

In its earnings report for the quarter ended December 2018, Bharti Airtel had disclosed that it had 284 million customers.

However, as per regulatory filings, Bharti Airtel reported having 340.2 million customers on its network in December and 340.3 million customers at the end of January.

Bharti Airtel crossed the 300 million customers mark in 19th year of its operations.

Vodafone Idea became the largest telecom player in the country with 400 million customers following the merger of mobile business of Vodafone India and Idea Cellular on August 31, 2018. (Source: The Hindu BusinessLine)


BSNL, MTNL 4G launch back to square one

The non-availability of 4G airwaves to public sector companies, at a time when the private sector is closer to embracing the next-generation 5G technology, is bleeding the companies further as subscribers desert the state-run carriers for rivals, putting their revival at risk.

The Telecom Regulatory Authority of India (Trai), the sector watchdog, has lobbed the ball back into the government’s court on the fourth-generation or 4G spectrum allocation sans auction to state-owned operators Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL).

“Early this week, the Trai in a letter to the telecom department said that the allocation of the spectrum to public-owned entities is an administrative matter and the government would be in the best position to dispose of the matter,” a DoT official said.

The development has, however, put the Prime Minister Narendra Modi-led NDA government in a fix, which was also considering to seek approval from the Election Commission of India (ECI) to take the radio waves allocation proposal to the Cabinet, following the growing pressure from nearly 2 lakh employees of the two service providers.

A query to DoT did not elicit any response.

In March, the department, in a letter to the telecom regulator, has principally sought suggestion on whether spectrum— a natural resource could be allocated to two state-driven operators administratively.

The government earlier said that it has sought views from Trai to sanction much-needed airwaves that could lead to the two telcos to foray into commercial 4G services.

In the absence of 4G spectrum, the two already-stressed telecom carriers say that they couldn't compete with the private sector rivals such as Reliance Jio, Bharti Airtel and Vodafone Idea.

In the 2012 Supreme Court verdict, quashing 122 licenses, Justice GS Singhvi noted that while transferring or alienating the natural resources, the state is duty bound to adopt the method of an auction and ensure that a non-discriminatory method is adopted.

The non-availability of 4G airwaves to public sector companies, at a time when the private sector is closer to embracing the next-generation 5G technology, is bleeding the companies further as subscribers desert the state-run carriers for rivals, putting their revival at risk.

The two telecom firms— BSNL that operates across 20 telecom circles and MTNL that serves Delhi and Mumbai metropolitans were already demanding the government to approve their revival proposals that also include allocation of 4G spectrum, virtual retirement scheme (VRS) and assets monetization. The BSNL employee groups also blamed the incumbent government of favouring Reliance Jio over a state telco. Billionaire Mukesh Ambani-owned Jio is a pure-play 4G operator that launched its commercial services in September 2016.

Recently, the All India Trade Union Congress (AITUC) also alleged that a deliberate attempt is being made to shut down BSNL. (Source: Economic Times)

Visa case: Former US employee of Infosys files an appeal for review in California court

A former Infosys employee in the US, whose lawsuit against the company for alleged visa fraud was thrown out last month, has now filed a notice of appeal at the District Court of California. A notice of appeal is filed to review a case.

According to filings in courtlistener.com, a non-profit legal search engine, a federal court judge in San Jose in March left the door open for Carl Krawitt — who had filed the lawsuit — to submit an amended complaint if he wished to, after dismissing his case. Krawitt had alleged in his case that Infosys had conspired to bring in Indian employees on B-1 business visas as trainers for a six-week programme at Apple though, as per legal requirements, they could only be brought on H-1B visas, which are tougher to get.

An official statement from Infosys is awaited. The company has three days to counter the notice.

Krawitt, who earlier worked with Infosys as a contractor, is understood to have made the case as a whistleblower and on behalf of the federal government. The San Jose court dismissed the case under the False Claims Act. Earlier, the California court cleared Infosys and Apple of wrongdoing, saying a trainer’s work under B-1 visa was acceptable and that neither firm had attempted to commit a fraud.

Apple claimed that there was no case to establish that this was done with intent.

This allegation is similar to ones made in the past, most notably by Jay Palmer, another former employee who first blew the whistle on Infosys. Palmer had alleged visa-related abuses, which triggered a US Federal government investigation. Eventually, the case got dismissed by federal judge Myron H Thompson.

Visa denials
According to recent United States US Citizenship and Immigration Services (USCIS) data, Infosys topped H-1B visa denials in FY18, ending September 2018, with more than 25 per cent of its 8,000-plus applications rejected.

Further, according to a CARE ratings report, the top five tech companies suffered a 49 per cent drop in H-1B petitions being approved in FY2018 compared to the previous fiscal. (Source: The Hindu BusinessLine)

Telecom dept likely to strike down Railways' free spectrum demand

Trai had earlier recommended the auction route for the allocation of 700 MHz spectrum to the Railways. The Department of Telecommunications (DoT) is likely to strike down the Indian Railways’ demand for airwaves worth Rs 65,000 crore in the 700 megahertz (MHz) band. The DoT is against giving a premium spectrum to Railways for free as it would lose out on the revenue from the auction of those airwaves, said sources familiar with the development.

The Railways had asked for 10 MHz of spectrum in 700 MHz band for setting up public safety and security services. After the Railways sent the proposal to the DoT, it was taken to the Digital Communications Commission, which in turned directed the DoT to seek the views of the Telecom Regulatory Authority of India (Trai).

Trai had earlier recommended the auction route for the allocation of 700 MHz spectrum to the Railways.

“The frequency band is earmarked for mobile services and allocating it to the Railways for non-commercial use may adversely impact levies like adjusted gross revenue, spectrum usage charges and licence fee,” a DoT official said.

This was conveyed to the regulator. The DoT is now awaiting Trai response. The airwaves in the 700 MHz band are considered premium for long-distance mobile communications as they require less number of mobile towers to provide services, compared to 3G and 4G services.

Trai recommended a base price of Rs 6,568 crore per megahertz of airwaves in 700 MHz band, implying the total value of airwaves at Rs 65,680 crore at the reserve price. The same 700 MHz band spectrum remained unsold in the 2016 auctions when Trai had fixed a base price of Rs 11,485 crore per MHz. (Source: Economic Times)

Rs 25K cr rights issue not enough for Vodafone Idea: Experts

Huawei CFO sues Canada for wrongful detention As telecom major Vodafone Idea (VIL) opened its rights issue on Wednesday for the next two weeks with an aim to raise Rs 25,000 crore, sector experts say the fund would not be enough for the company given its high debt and the highly-competitive market.

As telecom major Vodafone Idea (VIL) opened its rights issue on Wednesday for the next two weeks with an aim to raise Rs 25,000 crore, sector experts say the fund would not be enough for the company given its high debt and the highly-competitive market.

In the meantime, Bharti Airtel too has announced that on April 24 its committee for fund infusion would decide on the shareholders who would be able to participate in its rights issue for around Rs 25,000 crore.

Analysts say Airtel is in a better financial position than Vodafone Idea and unlike the newly-merged entity, the amount raised from the rights issue by Sunil Bharti Mittal-led Airtel would be sufficient for the time being.

Vodafone Idea is offering 2,000 crore shares at a price of Rs 12.50 apiece. The entitlement ratio of the issue, which will close on April 24, has been fixed at 87 rights shares for every 38 currently held.

Under rights issue, existing shareholders are offered to purchase additional stock shares, known as subscription warrants, in proportion to their existing holdings.

In a rights offering, the subscription price at which each share may be purchased is generally discounted relative to the current market price. Rights are often transferable, allowing the holder to sell them in the open market.

"Vodafone idea is very stretched because their Ebitda has fallen to about $650 million(around Rs 4,495 crore), their debt is also quite high and their leverage as measured by debt-to-Ebitda too is high," Nitin Soni, Director for corporate ratings at Fitch Ratings, told IANS. He said that Airtel is a diversified company and has operations in Africa as well while Vodafone Idea is a telecom-specific company which has severely deteriorated its financials.

"In that light, their (Airtel's) equity injection is sufficient and they are going to raise another $3 billion from African IPO and sale of assets, but for Vodafone idea it is insufficient and they might have to raise more money in future because their capex plan is about $3.5-4 billion," Soni said.

He added: "They (Vodafone Idea) need to invest heavily to avoid any network congestion and their Ebitda has fallen much more than Bharti's. So all in all they would probably need more equity, or stake or sale of other assets".

According to the company's promoter shareholders, Vodafone Group and Aditya Birla Group have confirmed their participation of up to Rs 11,000 crore and up to Rs 7,250 crore, respectively, in the rights issue.

"It is not compulsory that the rights issues of companies are fully subscribed over time, it is up to the market conditions and existing shareholders, and whether they rely on the management and the future expansion plans of the company," said Manish Yadav, Head of Research, CapitalAim.

Amit Gupta, Co-Founder and Chief Executive Officer at Trading Bells, said the fund would work for two or three quarters but the company would require additional infusion after that.

"Vodafone Idea has a overall debt of Rs 1,23,000 crore with a gross debt-to-Ebitda (earnings before interest, tax, depreciation and amortisation) ratio of 33.30. After infusion of the equity capital through the rights issue, the debt would reduce to Rs 98,000 crore and its debt-to-Ebitda ratio would decline to 26.50 which would still be higher than that of its competitors Bharti Airtel and Reliance Jio," Gupta said.

The company is also looking to sell its 11.5 per cent stake in Indus Towers in the next two to three months and raise around Rs 5,500 crore. Off late, apart from loss in revenue, Vodafone Idea has also lost a large number subscribers to both Bharti Airtel and Reliance Jio.

Vodafone Idea, the largest telecom operator in terms of subscribers, lost 35.87 lakh users taking its total base to 41.52 crore while both Jio and Airtel added to their subscriber base.

From the industry perspective, Prashant Singhal, Emerging Markets TMT Leader at Ernst & Young, said that although the rights issue would help in reducing the debt, the sector being a capital intensive industry, companies would continue to need capital for expanding and investing their networks.

He said that rationalisation of tariffs, which are extremely low currently, would give a much-needed boost to the sector, apart from the capital infusion. (Source: Economic Times)

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