Govt to auction 5G spectrum for 20 yrs; allows private captive networks

The government will auction a total of 72097.85 MHz of spectrum with a validity of 20 years by July-end, said an official statement

The Union Cabinet has cleared the auction for 5G airwaves paving the way for auction and commercial launch of next generation telecom services this year. The cabinet in its meeting on Tuesday approved Department of Telecom’s proposal for the auction of 72 GHz of spectrum for a 20-year-period. It also decided to “enable the development and setting up of private captive networks to spur a new wave of innovations in industry 4.0 applications”.

“A total of 72097.85 MHz of spectrum with a validity period of 20 years will be put to auction to be held by the end of July, 2022. The auction will be held for spectrum in various bands (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz), Mid (3300 MHz) and High (26 GHz) frequency bands,” the government said in a press release on Wednesday….Read More

Reliance Jio pays Rs 30,791 crore to clear bulk of spectrum dues

The company estimates that the above prepayments will result in interest cost savings of around Rs 1,200 crore

Reliance Jio on Wednesday said it has paid its entire deferred liabilities pertaining to spectrum acquisition prior to March 2021. The company has paid Rs 30,791 crore (including accrued interest) to the Department of Telecom towards prepayment of the entire deferred liabilities pertaining to spectrum acquired in auctions of year 2014, 2015, 2016 and the spectrum acquired in year 2021 through trading of the right to use with Bharti Airtel Limited. These liabilities were due in annual instalments from FY 2022-23 to 2034-35 and carried interest rate between 9.30 per cent to 10 per cent with an average residual period of more than 7 years. The company estimates that the above prepayments will result in interest cost savings of around Rs 1,200 crore annually, at the current interest rates, it said in a statement.

Airtel hikes prepaid tariffs by 20%, Vodafone Idea likely to follow suit

Company makes the first move to improve the financial sustainability of the telecom sector.

Telecom firm Bharti Airtel has hiked by around 20 per cent its pre-paid plans, making the first move to improve the financial sustainability of the sector. Vodafone Idea ( Vi, is expected to follow suit, as its chief executive officer Ravinder Takkar indicated last week that tariff hikes will happen soon. The company however has not yet made an announcement. Airtel and Vi had hiked rates in entry-level pre-paid plans and certain postpaid and family packs a few months back.

Airtel’s latest hikes will be for rates across all slabs (Rs 79 to Rs 2,498). It increased rates for data top-ups as well and said the new tariff plan will come into effect from November 26. Pre-paid customers account for 90-95 per cent of customer base for Airtel and Vi. “Bharti Airtel has always maintained that the mobile Average Revenue Per User (ARPU) needs to be at Rs 200 and ultimately at Rs 300, so as to provide a reasonable return on capital that allows for a financially healthy business model,” the company said in a statement on Monday.

“We also believe that this level of ARPU will enable the substantial investments required in networks and spectrum. Even more important, this will give Airtel the elbow room to roll out 5G in India,” it added.

Tribunal order on spectrum dues: Telecom dept says its reconsidering appeal

DoT requested Supreme Court to give it four weeks so that it can take an “informed decision” whether to proceed with its appeal against an order by Telecom Disputes Settlement and Appellate Tribunal.

The department of telecommunications (DoT) told the Supreme Court on Tuesday it is reconsidering its decision to proceed with an appeal filed against a tribunal order in April 2019 on the issue of recovery of one-time spectrum user charges (SUC) from companies to the tune of Rs 40,000 crore. It requested the court to give the government four weeks so that it can take an “informed decision” whether to proceed with its appeal against an order by Telecom Disputes Settlement and Appellate Tribunal.

The move is significant, as there are pending cases between telecom companies (telcos) and the government in various courts involving substantial amount of financial dues. According to sources, the number of cases go to over 200 in the Supreme Court itself. A DoT study done a few years ago said the total number of cases is as high as 2,800. These apart from the big ones include other financial demands made by DoT and challenged by telcos, disputes on interpretation of the notifications and the law and appeals reversing a decision of a lower court.

DoT, in an affidavit before the Supreme Court, said that it has taken a decision to review, considering the sector’s financial crises. It pointed out that despite government measures most operators are making financial losses. It told the court that the cabinet in September cleared a telecom package to ensure viability of companies and prevent a monopolistic situation in the sector….

Jio, Airtel, Voda Idea make Rs 21,916 crore upfront payments for spectrum

The telecom department had issued demand notes to the three operators on March 8, and the deadline for making the upfront payment was Thursday

Reliance Jio, Bharti Airtel, and Vodafone Idea on Thursday made upfront payments for the spectrum bought in the recently concluded auctions. It is learnt that while Reliance Jio has made a payment of Rs 15,019 crore, Bharti Airtel and Vi paid Rs 6,323 crore and Rs 574 crore, respectively.

The telecom department had issued demand notes to the three operators on March 8, and the deadline for making the upfront payment was Thursday. Reliance Jio emerged the highest bidder in the 4G telecom spectrum auction, beating incumbents Bharti Airtel and Vodafone Idea by a wide margin.

The Centre would get Rs 77,815 crore from the two-day auction — one of the shortest in a decade. While the amount has exceeded the government expectation, the total mop-up is far below the Rs 3.92 trillion worth of airwaves put up for sale.

The spectrum has been sold across a few preferred bands at the base price. Of the available spectrum of 2308 megahertz, 855.60 megahertz was sold in the auctions. Thirty-seven per cent of spectrum by quantity and 19 per cent by value were sold.

Oaktree-led consortium offers Rs 15,000 crore funding to Vodafone Idea

Varde Partners among the other participants; Bloomberg report does not specify how the potential deal between the two parties would be structured

A consortium led by Oaktree Capital Management has proposed providing capital of at least $2 billion (Rs 15,000 crore) to Vodafone Idea as the telecom company seeks funds for capital expenditure and debt servicing. Oaktree has teamed up with several other firms including Varde Partners, Bloomberg reported today. The report did not specify how the potential deal between the two parties would be structured but said that the Oaktree backed consortium has offered around $2-2.5 billion to the stressed telecom firm.

Vodafone Idea had announced plans to raise upto Rs 25,000 crore through a mix of debt and equity in September. Late last month following the second quarter results the company’s chief executive officer Ravinder Takkar said the fund raising plans are on track and would be completed in three months. “We are in discussions with interested parties. Engagements are going on and progressing well,” Takkar had said.

Vodafone Idea did not respond to an email query on Thursday while Oaktree Capital declined comment. Vodafone Idea, which has been in red for several quarters, saw losses reduce in September quarter to Rs 7,218 crore. In the year-ago quarter, the loss figure was Rs 50,922 crore, while in June 2020 quarter the telco’s net loss was Rs 25,460 crore. While losses have reduced, it has seen significant subscriber churn losing customers to rivals such as Bharti Airtel and Reliance Jio. The company has been facing a cash shortfall and has indicated that its ability to continue as a going concern depends upon successful negotiations with banks for refinancing of loans and guarantees…

Telecom dept asks Voda India, Airtel to pay Rs 3,050 cr in penalties: ET

Airtel has to pay Rs 1,050 crore and Vodafone Idea Rs 2,000 crore, says report.

The telecom department has asked Vodafone Idea and Bharti Airtel to pay within three weeks Rs 3,050 crore as penalties for allegedly breaking licence terms by denying Reliance Jio Infocomm their networks, the Economic Times reported Friday two weeks after the government announced a relief package for the industry. Airtel has to pay Rs 1,050 crore and Vodafone Idea Rs 2,000 crore for the alleged violation of norms on points of interconnection (PoIs) in 2016, said the newspaper. The Telecom Regulatory Authority of India (Trai) had recommended fines in 2016; the telecom department accepted its recommendations in June 2019 but had not served the notices till now.

Vodafone and Idea merged in August 2018.

The union cabinet on September 15 approved a relief package for its cash-strapped telecoms sector including a four-year moratorium on airwaves payments due to the government. The measures gave breathing space to debt-ridden Vodafone Idea, which previously said it runs the risk of a shutdown without government help and more time to pay dues.

Asia’s richest man Mukesh Ambani adds $18 billion to his fortune in 2019

In comparison, Alibaba Group founder Jack Ma’s net worth grew $11.3 billion, while Jeff Bezos lost $13.2 billion

It’s been a good year for Asia’s richest man, Mukesh Ambani. The Indian tycoon added almost $17 billion to his wealth as of Dec. 23, the most in Asia, taking his net worth to about $61 billion, according to the Bloomberg Billionaires Index. In comparison, Alibaba Group founder Jack Ma’s net worth grew $11.3 billion, while Jeff Bezos lost $13.2 billion. 

The surge in Ambani’s fortune this year was fueled by a 40% jump in the shares of his Reliance Industries Ltd., a conglomerate that’s pivoting more toward consumer offerings than its core oil refining and petrochemicals businesses. The rally in the stock is more than double the gains for India’s benchmark S&P BSE Sensex index during the period.

Investors are piling money on Reliance, betting newer businesses such as telecommunications and retail could soon unlock value. With a goal of building a local e-commerce giant to challenge the likes of Amazon.com Inc. in India, Mukesh Ambani has spent almost $50 billion — mostly debt — on a wireless carrier that’s become India’s No. 1 within three years of debut.

“Mukesh Ambani changed the narrative for Reliance Industries” as a leader not just in oil and gas but also in telecom and retail, and possibly soon in e-commerce as well, said Chakri Lokapriya, chief investment officer at TCG Asset Management, which oversees $3 billion in assets in Mumbai.

Reliance Jio tower assets sold to Canada’s Brookfield for Rs 25,000 crore

Reliance Jio lnfratel has a portfolio of about 130,000 telecom towers that form the backbone of Reliance Jio Infocomm’s network

Reliance Industrial Investments and Holdings (RIIHL), a wholly-owned subsidiary of Mukesh Ambani-led Reliance Industries (RIL), has entered into binding agreements with Canada’s Brookfield Infrastructure Partners LP and its institutional partners for an investment of Rs 25,215 crore in the telecom tower assets of the RIL.

In a notification to the stock exchanges, RIL noted that Brookfield and its partners would invest Rs 25,215 crore in the units to be issued by the Tower Infrastructure Trust. At the closing of the transaction, the Trust will own 100 per cent of the issued and paid up equity share capital of Reliance Jio lnfratel. Brookfield will buy 100 per cent units issued by the Trust, which, in turn, owns 100 per cent equity of Reliance Jio Infratel, the operating company for Jio’s tower assets.

Reliance Jio lnfratel has a portfolio of about 130,000 telecom towers that form the backbone of Reliance Jio Infocomm’s network. There are plans to build additional towers and the total number of towers is expected to reach approximately 175,000 towers. Jio is an anchor tenant of the tower portfolio under a 30-year Master Services Agreement.

“We are pleased to enter into this long and strategic relationship with Brookfield, which is one of the largest and most respected managers of infrastructure assets globally. We are confident of Brookfield’s abilities to manage this large portfolio of high-quality infrastructure assets and further enhancing value creation opportunities. This transaction demonstrates the belief of global investors in the potential of India’s digital opportunity”, said Mukesh Ambani, chairman and managing director of RIL.

After $13-bn AGR hit, future of India’s tattered telecom hinges on govt aid

Vodafone Idea this month booked a $7 billion quarterly loss, the biggest in Indian corporate history, in large part due to provisions for payments owed

Companies News: The Indian government’s win of a long-contested dispute over telecom fees could end up a Pyrrhic victory, as the billions of dollars in levies now owed are seen as burdens too big to bear for two of the country’s three main carriers. Vodafone Idea Ltd, India’s biggest carrier by user numbers, is widely regarded as most on the ropes, with parent Vodafone Group calling the situation “critical” after the unit was saddled with about $3.9 billion in fresh payments due.

That is the biggest portion of the $13 billion incurred by the sector after India’s Supreme Court last month sided with the government in how spectrum usage and licence fees are calculated. Bharti Airtel, the No 3 provider which must pay roughly $3 billion under the ruling, has also flagged distress, saying the decision casts much doubt on “its ability to continue as a going concern.”

To industry executives and analysts alike, there’s only one solution for the sector which was even before the current crisis debt-ridden and battered by a brutal price war: significant government financial support. Hopes have been raised after the government deferred upcoming spectrum payments for the next two financial years until March 2022. Finance Minister Nirmala Sitharaman also said this month that relief is under consideration although no final call had been made….