Congratulations to The Pioneer, Outlook, Gopikrishnan and Subramanian Swamy
and/or www.mantra.com/jai
Wednesday, May 19, 2010
Congratulations to The Pioneer, Outlook, Gopikrishnan and Subramanian
Swamy
This is a tribute to heroes of the nation: The Pioneer, J.
Gopikrishnan, Outlook and Dr. Subramanian Swamy.
Pioneer, J. Gopikrishnan, Outlook and Dr. Subramanian Swamy should be
complimented for exposing and making the judicial system and the
nation aware of the mother-of-all-scams called 2G spectrum scam. It
is to their credit that the scam was NOT allowed to be repeated; 3G
spectrum licenses were subjected to a fair, auction process instead
of following the murky 2G spectrum allotment process.
It will be a fitting tribute to their efforts if the judicial system
renders justice and punishes the perpetrators of the scam and
reaffirms that this nation is governed by the rule of law.
At the same time, it is distressing that the opposition parties did
not realise the enormity of the scam and did not initiate effective
political strategies to bring the ruling dispensation to account.
Opposition parties have to introspect and realise their
accountability to the people in conserving the wealth of the nation
for the present and future generations, be it the recovery of this
spectrum loot or the recoveries of vulgar quantities of monies
stashed away in tax havens, thus denying the use of these monies for
the nation's abhyudayam.
The results of 3G auctions speak for themselves. A whopping 67,719
crore ($15 billion) was realised, double the expected and budgeted
revenue. Just compute what the nation would have gained from the
earlier 2G spectrum allotment, if only a similar auction procedure
was followed.
This success of 3G auction reinforces the nature and magnitude of the
2G scam which has resulted in a loss of not less than Rs. 50,000
crores to the exchequer.
The CBI raids and the revelations about transfers of funds into tax
havens, point to the need for eternal vigilance and bringing the
culprits to book as a salutary lesson to be learnt by future wheeler-
dealers that the rule of law will catch up with the perpetrators of
the mother-of-all-scams.
The post-colonial loot, accelerated during the last 5 years surpasses
the colonial loot almost by 200%. The monies stashed away in tax
havens through participatory notes route and other hawala routes have
to be recovered to set India on a path of growth which was stemmed by
the mediaeval barbaric onslaughts and later colonial regime. India
that accounted for 30% of the world GDP at the turn of the Common Era
has to be enabled to gain back its rightful place in the computations
of wealth of nations.
Will the politico-s be equal to the challenge to restore India to its
rightful place in the comity of nations?
The media has its role to play and should wholeheartedly support the
initiatives of Pioneer and Outlook media and recognize the debt that
the nation owes to extroarinary, exemplary citizens of the nation: J.
Gopikrishnan and Dr. Subramanian Swamy.
After all, it is the role of the Fourth Estate to safeguard and
protect the fair functioning of other three estates. The deafening
silence of media and some politial parties in turning a Nelson's eye
to the mother-of-all-scams should be a matter of concern to all
functionaries of the Fourth estate.
The political system which operations on a bizarre, absurd term
called coalition dharma, should also do its bit of self-reform. The
ruling dispensation should realise that an enormous price is paid in
depriving the poor people of India of their share of the wealth of
the nation by allowing coalescing partners to choose 'prize'
portfolios. Aha, prize portfolios which allow for price
manipulations.
Who's in charge in ensuring integrity in the Indian polity and its
accountability to the sovereign, the people?
Are the politico-s listening? Are the media listening?
S. Kalyanaraman
3G spectrum auction closes, colors other than VIBGYOR sold
Reported by Wimwian on May 19th, 2010
New Delhi. After a month long auctioning, the Department of
Telecommunications (DOT) not only declared the process over, but also
revealed the path-breaking technology that differentiated 3G over the
2G spectrum. The third generation spectrum would have many more
colors than the seven traditionally acknowledged in the spectrum --
Violet, Indigo, Blue, Green, Yellow, Orange, and Red -- better
represented by the acronym VIBGYOR. As a result, the government could
earn 70,000 crore rupees, much higher than it had expected.
"No, it's not the result of absence of any scam, but an outcome of
our observation that led to this success." Telecommunications
Minister A Raja said, referring to the huge revenue realization and
the technological breakthrough.
A Raja thinking why he couldn't solve the color riddle earlier, even
though his party DMK had successfully offered color televisions to
the voters
Talking exclusively to Faking News business reporter SK Wimwian, Mr.
Raja went on to claim that this shall be one of UPA-II's major
contributions to many generations of aam aadmi's.
Initially reluctant to divulge details to our reporter, Mr. Raja
later opened up over tea and samosas, and let slip the fact that his
Ministry had longed wondered over steps to graduate into 3G from 2G.
However, the DOT's think-tank had noticed that a few years back Hutch
had changed its color from Orange to Pink, and its networks still
continued to function normally.
This chance observation led the DOT to its intellectual breakthrough
-- namely, that all existing operators can be asked to select a shade
other than VIBGYOR, thereby freeing up their original part of
spectrum.
A senior DOT source speaking on the condition of anonymity also said
that the issue over allocation of spectrum to the armed forces is
being resolved in consultation with the Ministry of Defense.
Apparently, the ministries were going to permanently allocate Black
color to the defense forces, which was not only outside the normal
VIBGYOR spectrum, but also very difficult for other countries to
detect or intercept. A proposal to similarly allocate Grey to police
and paramilitary forces would be discussed in due course, the source
added.
DOT will soon release a press release listing the number of colors
and respective operators.
http://www.fakingnews.com/2010/05/3g-spectrum-auction-closes-colors-
other-than-vibgyor-sold/
Spectrum uncertainty drove up bidding prices
Shalini Singh, TNN, May 20, 2010, 01.28am IST
Indraprasth aka New Delhi - The 3G auctions have beaten all revenue
projections by analysts, government and private operators, with
government coffers expected to surge within the next 10 days as
bidders deposit their money.
What drove 3G prices to this level -- almost double of what was
expected? The simple answer is uncertainty about future spectrum
availability and an artificial shortage that was created in 2008 when
telecom minister A Raja allocated spectrum to 120 companies at 2001
prices.
In 2008, Raja allocated about 528 MHz of spectrum (4.4 MHz x 120
licences) at roughly Rs 9,000 crore on a first-come-first-served
basis. It is well known that the real price through an auction for
this spectrum should be at least 6 times or closer to Rs 50,000
crore. The government then decided to auction 355 MHz of 3G spectrum
through an open, multi-stage bidding process (5 MHz x 71 licenses).
This has fetched Rs 16,750.58 crore for a pan-India 3G slot vis-a-vis
Rs 1,651 for a pan-India 2G licence.
Essentially what happened is that a total of roughly 580 MHz of total
2G plus 3G spectrum was available at the beginning of 2008. Of this,
the government allocated 2G spectrum at throwaway prices, enabling
the winners to hold private auctions. Since the total amount of
spectrum in the system declined sharply and no information was
available to bidders on when the next round of spectrum would be
available, it drove up 3G prices almost to a point of panic.
Confirming this, Bharti Airtel which bagged 13 circles including the
lucrative Delhi and Mumbai circles, said, "we would like to point out
that the auction format and severe spectrum shortage along with
ensuing policy uncertainty, drove prices beyond reasonable levels. As
a result, we could not achieve our objective of pan-India 3G
footprint in this round".
On an average, Indian operators hold 5.7 MHz of spectrum though
Bharti and Vodafone have a larger spectrum holding. The winners of
the 3G pan-India bid will now move to an average of 11 MHz per
circle, which is closer to the international average of 18 MHz.
So essentially driven by an artificial shortage and rock bottom
spectrum prices in 2008, the 3G auctions have seen a much higher bid.
It remains uncertain when the next lot of 3G spectrum will be
available for auction. Under the current rules, if it is released
within a year, then the current 3G price will be the benchmark but if
it is beyond a year then fresh auctions will have to be held.
http://timesofindia.indiatimes.com/articleshow/5951244.cms?prtpage=1
A Case For Intervention
Shalini Singh, May 19, 2010, 12.00am IST
The Telecom Regulatory Authority of India's (TRAI) recommendations on
2G spectrum are of significance not just for the telecom sector but
equally for the common man. Inefficient spectrum management or
pricing can seriously jeopardise India's ability to leapfrog its
social infrastructure in the areas of primary health, education,
rural development and even banking. It also has the ability to take
India's broadband ambitions already delayed by a decade back by
another five years. Including defence, the spectrum issue directly
impacts six ministries and many others indirectly.
World-class regulation is characterised by neutrality,
predictability, orderly growth and the ability to foster competition,
investments and technological innovation for the general good of
consumers. Do telecom regulator TRAI's recent recommendations meet
these benchmarks?
Let's first put neutrality to the test. TRAI has some operators
cursing it for being perverse and anti-consumer while others believe
they have been offered the next best thing after sliced bread. Here's
why: Bharti, Vodafone, BSNL and Idea will have to cough up thousands
of crores for their existing 2G spectrum holding beyond 6.2 MHz even
though this spectrum was allocated under firm legal contractual
arrangements over the last 10 years.
In contrast, new entrants and dual technology operators who received
4.4 MHz of 2G spectrum in 2008 at 2001 prices are not required to pay
market or 3G auction-linked rates. They have been given additional
spectrum till 6.2 MHz without having to pay 3G prices. The cumulative
gains to these firms Swan (Etisalat), Unitech Wireless (Telenor),
Datacom (Videocon) and Loop are roughly Rs 90,000 crore. Predictably,
they are either quiet or heaping abundant praise on TRAI.
TRAI implies that the contractual right of incumbent operators for
spectrum beyond 6.2 MHz is insignificant while the same rights for
the same spectrum given to new entrants under the licence somehow
guarantees them a superior legal footing. By failing to price
spectrum equitably, TRAI has failed the first test of neutrality.
Where does TRAI stand on predictability? TRAI has mostly reversed
earlier policy decisions of A Raja, Union minister for communications
and information technology. Raja, only a fortnight ago, said 3G
spectrum was auctioned because it was Basmati-grade while 2G, being
PDS-grade rice, had to be sold at 2001 prices. Trashing this notion,
TRAI wants to price 2G beyond 6.2 MHz at par with 3G.
In 2008, Raja said he was adding more competition despite 7-8
operators to dismantle a 'cartel' in defence of his decision to
allocate 2G spectrum to select companies at 2001 prices through a
first-come-first-served process. Just two years on, TRAI's new M&A
norms say six operators are sufficient despite the fact that there
has been only 40 per cent service rollout of the 122 licences issued.
TRAI further wants to take back spectrum in the 900 MHz band from
existing operators and refarm it when licence tenures come to an end.
Experts question why TRAI has been selective with the 900 MHz band
which is used by a handful of incumbents and not the 800 and 850 MHz
bands. Admittedly, TRAI's refarming proposals are technologically
sound but do they further the cause of competition and
predictability? It is safe to conclude that TRAI fails the test of
predictability, creating a landscape full of policy minefields and
signs that screech, "Drive at your own risk: TRAI ahead".
TRAI's scores on competition are also low. It has linked GSM spectrum
beyond 6.2 MHz to 3G prices but doesn't explain why retrospective
pricing is essential for spectrum beyond 6.2 MHz but not up to 6.2
MHz. If promoting fair competition was a key driver for TRAI, then
new entrants would have been charged the same 3G price, fetching the
government an additional Rs 91,000 crore at current 3G bid prices.
Secondly, if GSM spectrum beyond 6.2 MHz is to be pegged at 3G
prices, then why treat a combination of GSM and CDMA spectrum
differently? By TRAI's rules, above 6.2 MHz of spectrum attracts 3G
pricing, but 11.2 MHz of GSM plus CDMA (6.2 MHz + 5 MHz) does not.
Should spectrum pricing not be technology neutral? Where spectrum
costs are concerned, will this adversely skew the competitive
landscape between new entrants and incumbents and between pure play
GSM and dual technology operators?
In conclusion, TRAI has been inexplicably discriminatory by allowing
a handful of operators to make a killing a second time round at the
cost of the exchequer and innocent taxpayers. Operators are preparing
to lobby their cause with Raja or seek justice in the courts. By
replacing subscriber norms with rollout obligations for access to
top-up spectrum and leaving a lot vague or unsaid, TRAI's
recommendations have created enormous powers for Raja, kickstarting
lobbying and horse-trading activities afresh.
Since the statutory process must be respected, the government is
perhaps best advised to rapidly constitute an empowered group of
ministers (eGoM) and seek global advice on spectrum management. For
2G too, the law ministry had recommended that an eGoM decide on
complex spectrum issues. Later, for 3G it was the eGoM that ensured
that auctions took place.
The issue is far too serious to be left to a handful of politicians
and bureaucrats in the Department of Telecom. If the government
doesn't act now, this episode, like the one in 2008, will return to
haunt it for years.
http://timesofindia.indiatimes.com/articleshow/5951244.cms?prtpage=1
3G spectrum: Govt hits jackpot; gets Rs 67,719 crore
20 May 2010, 0037 hrs IST,ET Bureau
Four years of delay, 34 days and 183 rounds of frenetic bidding
later, the auction of 3G mobile spectrum wound down on Wednesday,
delivering an unexpected bonanza of Rs 67,719 crore ($15 billion) for
the government's dry coffers and paving the way for services such as
video calling and high-speed internet using phones to be launched
across India.
For auction-weary mobile firms already battling a savage price war,
the end of the process marks the start of life under a pile of debt
that could strain balance-sheets for years, possible consolidation
activity or network sharing pacts between operators as losers look to
plug service gaps to prevent customers from jumping ship.
The auction failed to throw up a pan-India licence holder. The
country's top two mobile firms Bharti Airtel and Reliance
Communications each won 13 of the 22 telecom zones on offer, while
other major operators Vodafone Essar, Idea Cellular and Tata won
total of 9, 11 and 9 circles respectively.
Bharti, Reliance and Vodafone won the coveted 20-year licences for
New Delhi and Mumbai, which account for a lion's share of the
country's customers and revenues and attracted top bids of Rs 3,317
crore and Rs 3,247 crore respectively, effectively Rs 166 crore and
Rs 162 crore per year of the licence period.
The auctions were for a maximum of three operator slots in all but
one circle. State-run BSNL and MTNL will be the fourth operator of 3G
services. Ministers were thrilled with the outcome, which comes at a
time the government is under fire from industry over flip-flops in
policy.
"The figures were far beyond our expectations and I am happy for
that," said telecom minister A Raja, who has spent much of the last
two years facing accusations that he gave away precious 2G mobile
spectrum to a clutch of new operators for a song. Raja promised to
release spectrum to all winners by September and said customers could
have 3G services by the year-end or early next year.
Will 3G be a money-spinner?
Finance minister Pranab Mukherjee, who had budgeted a total of Rs
35,000 crore from both 3G and WiMAX spectrum auctions, was more
ebullient. "It is good... It will give me that much more elbow room,"
a visibly elated Mr Mukherjee told reporters. The government has
budgeted fiscal deficit at 5.5% of GDP for this fiscal year, and
economists are hopeful the spectrum auction proceeds could flatter
that number.
But the reaction from mobile operators has been mixed. Industry
leader Bharti Airtel, which failed to achieve its objective of a pan-
India 3G footprint in the auction, said "the auction format and
severe spectrum shortage along with ensuing policy uncertainty drove
the prices beyond reasonable levels".
Doubts exist whether 3G services will prove to be a big money-spinner
and ease the pressure on the sector, and some experts cite the
experience of developed western markets where 3G services are only
now starting to gain traction despite being around for at least five
years.
But Vodafone Essar CEO Marten Pieters said he expected strong
interest for 3G especially "among the higher value customers, which
is a growing segment owing to rising affluence and increasing urban
population".
Gartner analyst Naresh Singh also said the price may be viable in the
ultimate analysis. "Obviously, the pricing looks very high, but if
you look at 500 million subscribers, 3G has the potential as it can
be used for both voice and data," he said.
For operators, 3G services offer the potential to earn higher
revenues, a video call can cost up to two rupees a minute compared
with 60 paise for a voice call. Operators can also leverage their 3G
networks to launch pricier data plans, offering customers unlimited
high-speed net access.
The government's success in the 3G auction sets the stage for
frenzied bidding in the soon-to-start auction of broadband wireless
(BWA) or WiMax spectrum, which also allows delivery of 3G services
and will be coveted by mobile operators and others such as Qualcomm,
Spice group and Tikona.
Analysts have pencilled in at least around Rs 35,000 crore from the
BWA auctions, although telecom minister Mr Raja said the success of
the 3G auctions showed that "targets and expectations have no value".
"We expect the bidding to be strong there (for BWA)."
As news of the auction results trickled in, there was relief among
some investors that the operators had not overshot their bid war
chests by a large margin, although concerns about the overall profit
outlook for the sector remain.
"The amount that the companies are going to pay is collectively much
more than what was expected. But I don't think that the individual
operators have hugely overshot their targets, though they have got
lesser number of circles than expected," said Jayesh Shroff, fund
manager with SBI Mutual Fund.
Long viewed as an eternal sunshine sector and an investor darling
because of its seemingly limitless growth potential, the telecom
sector has seen a substantial re-rating in recent months as revenue
and profit growth slows under the onslaught of cut-price tariffs and
a multiplicity of operators. Some telecom circles have as many as 11
operators and operate in an environment of 40% customer churn.
The sector has been the worst performer in the BSE Sensex since the
tariff wars broke out in October last year. Bharti is down 40%, Idea
29%, and Reliance Communication has fallen 57% during this period. On
Wednesday, shares in Bharti, Idea and RCom closed 3.08%, 7.37% and
5.66% lower. News of the auction's end came after markets closed for
the day.
Sundaram BNP Paribas Asset Management's equities head Satish
Ramnathan said he was less than optimistic about the sector. "The 3G
auction is no great deal for the companies or investors and
consumers. The telecom industry today is an overcrowded space with no
clear stance on the policy. Corporates do not have the power to fix
prices because of multiplicity of operators and as a result the
return on equity is dropping. The overall structure of the industry
is a concern," he said.
http://economictimes.indiatimes.com/articleshow/5951145.cms?prtpage=1
End of forwarded message from S. Kalyanaraman
Jai Maharaj, Jyotishi
Om Shanti
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