Convergence Plus
Friday, July 20, 2018
Tata Teleservices prepares exit plan for staff

Department of Telecom makes IMEI tampering a punishable offence that can attract a 3 year jail termTata TeleservicesBSE -13.23 % (TTSL), the telecom unit of Tata Sons, is preparing an exit plan for most of its 5,000-odd employees, which includes a notice of three to six months, severance packages for those willing to leave earlier, a voluntary retirement scheme (VRS) for elders, while transferring only a small part of its employees to other group companies. Company executives and industry insiders said the debt-laden telecom company, which will shut its operations soon, had last month asked circle heads to leave by March 31, 2018.

"The Tata Group has always taken care of its people, but very few will get absorbed in other group companies. It is unfair to saddle other Tata companies with employees of TTSL," said a senior official, who did not wish to be identified. The transfer may only happen if there’s a niche set of skills needed in other firms that may match with those of employees in the telecom unit. There may be voluntary retirement schemes for the senior employees — above a particular age — that will be rolled out in the next few months, said a senior official in the Tata Group. For majority of the employees, the telecom unit of the Tata Sons will offer a notice of at least three-six months and those who want to leave can take the severance packages.

There were 5,101 employees on its rolls as on March 31, 2017, as per the latest annual report. Search firms which are dipping into the telecom sector for profiles said they have received resumes from circle heads who want to exit the telco, and have been given a time frame to do so.

"Circles heads of Tata Teleservices whose resumes we are placing have been given time till March 31 and were told of this in September. If they leave now, they will be given the salary for the remaining months of this financial year," said Kris Lakshmikanth, chairman of search firm Headhunters India. A circle head's salary can be up to Rs 1 crore.

Tata Teleservices did not respond to ET’s queries till the time of going to press. According to an ET report published last Saturday, the Tata Group informed the government that it plans to shut its wireless business, and will start the process in a month.

The brass of TTSL and representatives from the promoter group met Department of Telecommunications (DoT) officials and discussed ways of surrendering or selling their existing spectrum holdings, some of which have been allocated administratively by the government and some have been bought through spectrum sales over the past few years.

This will be one of the first big Tata units to be shut in the group’s 149-year-old history. Tata Teleservices, which was set up in 1996 with landline operations, had a cheqered history. It launched CDMA operations in 2002, then adopted GSM in 2008 and received Rs 14,000 crore of investment from NTT Docomo, which eventually decided to exit the loss-making joint venture in 2014, citing weak financial performances.

The group had earlier tried forming alliances with other companies but didn’t fructify mainly due to the telco’s debt burden of about Rs 30,000 crore. (Source: Economic Times)

TechM files petitions against RCom, subsidiaries over dues

TechM files petitions against RCom, subsidiaries over duesReliance Communications today said IT services major Tech Mahindra has filed insolvency petitions against the company and its two subsidiaries for recovering dues. The quality of service and amounts billed are disputed, RCom said in a regulatory filing terming the petitions as “misconceived, premature and motivated by extraneous considerations“. “We wish to inform you that Tech Mahindra Ltd, a vendor for call centre services, has filed petitions, as an unsecured operational creditor under IBC (Insolvency and Bankruptcy Code against the company, Reliance Telecom and Reliance Big TV, subsidiaries of the company for certain bills submitted by them for services allegedly rendered,” the Anil Ambani company said.

Noting that the aggregate amount of Tech Mahindra’s claim against all the three companies worked out to Rs. 8.20 crore, RCom said “the claim amount is not considered material by respective companies concerned“.

“We submit that the petitions are misconceived, premature and motivated by extraneous considerations,” it added.Reliance Communications, which is reeling under a debt burden of about Rs. 46,000 crore, recently called off merger talks with Aircel, citing “legal and regulatory” delays.

RCom and Aircel had signed binding agreements in September 2016 for the merger of mobile business.RCom’s Rs. 11,000 crore tower deal with Brookfield is also being reworked following termination of wireless merger talks with Aircel. Aircel tenancy would have been a sweetener for Brookfield in the tower deal, but the recent collapse of merger talks (between RCom and Aircel) prompted a renegotiation on contours of the deal between the Anil Ambani company and the Canadian firm. (Source: The HinduBusiness Line)

Trai to meet telcos on international termination rates

Trai to meet telcos on international termination ratesTrai will come out with a separate regulation on the international termination charges, currently pegged at 53 paise per minute, the official said.
After fixing the contentious domestic mobile call termination rates, the telecom regulator is all set to meet the operators this month to review international termination charge, a senior Trai official said.The meeting with international long distance operators and the access providers is likely on October 16. The Telecom Regulatory Authority of India (Trai) will ask the operators to give a presentation on the global practices, factors affecting such rates and suggest suitable methods for deriving the international termination charges..

Trai will come out with a separate regulation on the international termination charges, currently pegged at 53 paise per minute, the official said. The issue had formed a part of the consultation paper on Interconnection Usage Charges or IUC but was carved out for separate deliberations by the regulator.

Last month, Trai decided to slash the charge paid by an operator for terminating a domestic mobile call on a rival network -- also called mobile termination charge -- to 6 paise a minute, from 14 paise.

It had further said no such charge would apply from January 1, 2020. The new IUC regulation - which caused a furore in the industry - came into effect from October 1. The consultation paper on IUC, of which international settlement rates and termination charge overhaul is a part, had sought stakeholder views on approach that should be taken for prescribing such charges in the country, and whether they should be kept uniform for all terminating networks.

Another issue it raised was on sustainability of standalone ILDOs (international long distance operators), given the presence of integrated service providers (having both international long distance and access service licenses), and remedy for the same.

The international settlement rates or international termination charge to be paid to the Indian access provider is decided domestically.

"During discussions, operators have submitted that the termination charge for international calls fixed by the authority, puts the Indian access providers in a hugely disadvantageous situation vis-a-vis foreign service operators, as termination charges in some other countries are 8 to 10 times higher than international termination charges in India," the Trai paper had said.

On the other hand, some operators are of the view that there is no extra cost involved in terminating the international call, and, therefore, termination charges for domestic and international calls should be same, it had pointed out. (Source: ETTelecom)

Idea Cellular records highest 4G upload speed in September

Idea Cellular records highest 4G upload speed in SeptemberIdea Cellular today said it achieved the highest 4G upload speed in September citing data compiled by TRAI’s My Speed App. Idea Cellular topped the chart in terms of average 4G upload speed for September at 6.307 mbps, the private telecom player said in a statement reeling off TRAI data. It reported a high average download speed of 8.74 mbps (megabits per second) during the month and has been consistently recording highest upload speed in the last six months, the operator added.
TRAI tabulates data download speed with the help of its MySpeed app.

Idea Cellular has rapidly expanded network to 2.60 lakh sites across the country, with 50 per cent dedicated to mobile broadband services, it said in a statement. The company added nearly 50,000 broadband sites over the last 12 months to August, growing its broadband footprint to cover 5,888 census towns and close to 1.05 lakh villages and reaching out to 45 per cent population of the country, it stated. (Source: The Hindubusiness Line)

Telecom sector critical, needs urgent government help: Experts

Telecom sector critical, needs urgent government help: ExpertsNot just fiscal policy support but a structural one is needed to ease the massive debt burden which is "slowly strangulating" the telecom sector, opined experts. Industry observers stated that at stake is not only the telcos ability to employ manpower and resources for introduction of next-gen communication technology, but severe consequences for lenders and nearly 150,000 jobs. Among the solutions prescribed by experts are setting up of a Telecom Finance Corporation and giving the industry priority sector lending (PSL) status. If PSL status is allowed, then borrowing, overall cash-flow and debt management will become easier for all telecommunications service providers (TSPs), some experts told.

Others believe the government should look at setting up a Telecom Finance Corporation to ensure priority lending and also give the sector a tax holiday as it transitions from voice to data. According to Arpita Pal Agrawal, Partner and Leader, PwC India, the government "can additionally look at declaring the sector as a priority to facilitate the future network expansion requirements of the sector".

"Government could also review the hyper-competitive situation in the sector in light of customer interest in the medium- to long-term which is best served, in a market of this size, with at least three-four operating telcos actively competing on factors such as price, quality, innovation, etc," Agrawal said. Interestingly, nearly half the sector debt is in the form of deferred spectrum liabilities to the Department of Telecommunications (DoT), said Tanu Sharma, Associate Director, India Ratings & Research.

"Rationalisation of spectrum pricing and elongation of DoT debt maturities could be options used by government to ease the stress on the sector." Besides high spectrum and infrastructure costs, the total levy paid out by the telecom sector is about 29 to 32 per cent -- which is one of the highest in the world.

"Incentivise private or public players to invest in broadband infrastructure and allow flexibility of export of redundant active equipment," elaborated Hemant Joshi, Partner, Deloitte Haskins & Sells LLP. He added: "Relax single-borrower exposure limits on banks for credit-worthy telecom companies and allow issuance of tax free bonds."

The TSPs can also balance debt levels through monetising of non-core and tower assets to mitigate the pressure on their credit profiles, Sharma noted. On its part, the government has formed an inter-ministerial group (IMG) to look into the issues faced by the sector.

The IMG has reportedly recommended to the Telecom Commission that the period of deferred spectrum liability payment be increased to 16 years from the current 10 years.

Another recommendation by the IMG is that the telcos may be allowed to pay for the spectrum with interest calculated marginal cost of funds-based lending rate rather than the prime lending rate.

At present, the sector is burdened with astronomical debt -- to the tune of nearly Rs 8 lakh crore by some estimates -- and heavy losses due to a slew of freebies which are being doled out by incumbent telecom players to retain their customer base.

The grim reality that the sector faces can be gauged by the comments made by Communications Minister Manoj Sinha at the recently held India Mobile Congress: "The government is aware of the stress in the sector... We will make sure that the sector does not die."

Currently, India's telecom network is the second-largest in the world after China, in terms of the number of telephone connections.

As per the Annual Report 2016-17 of the Department of Telecommunications, the country had 1,124.41 million telephone connections, including 1,099.97 million wireless telephone connections with an overall tele-density of 87.85 per cent.

Other estimates show that the mobile industry in India contributes 6.5 per cent ($140 billion) to the country's GDP, and employs over four million people (direct and indirect). (Source: Economic Times)

Rahul Commerce
ITU Telecom World 2018
Convergence Summit
convergence plus