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SBI requests DoT to reconsider move to cancel RCOM’s spectrum license

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New Delhi, July 26 (IANS) Lending major State Bank of India (SBI) has written to the Department of Telecommunications (DoT) to reconsider its move to cancel Reliance Communications (RCOM) spectrum license.

The request for reconsideration was made via a letter dated July 23 sent by SBI’s Chairman Rajnish Kumar to Telecom Secretary Aruna Sundararajan.

The banking major leads the Joint Lenders’ Forum (JLF) which has the maximum lending exposure to the company.

As per Kumar’s letter, cancellation of RCOM spectrum will lead to irreparable financial harm to SBI and many other PSU banks.

“We understand from Reliance Communications and Reliance Telecom that Department of Telecommunications appears to be contemplating revocation of spectrum allocated to both the companies due to non-submission of Bank Guarantees (BGs) that is to be submitted by the companies on expiry of earlier BGs given by them while bidding and securing license for the allocated spectrum,” Kumar said.

“State Bank of India, as part of consortium of banks, are lenders to the above companies and the loans and advances extended by us or consortium of banks are secured by charged hypothecation or mortgage or assignment of assets of above companies in favour of us or consortium of banks.”

Kumar informed Sundararajan, that accounts of the above companies became NPA in the consortium’s “books and we along with other lenders had initiated debt resolution plans and assets monetisation plans to recover our dues”.

“We now understand, that Department of Telecommunications is contemplating to exercise its power to revoke the spectrum allocation to the above companies. We may submit that any such action will seriously jeopardize the efforts of the secured lenders to recover their dues,” he said.

“The debt resolution plans and assets monetization plans previously initiated by the secured lenders or company had not seen fruition. The proposed sale of the spectrum and other assets appears to be viable chance of debt resolution for lenders including many public-sector banks.”

“In the event of the proposed sale process not culminating due to the possible revocation of spectrum allocation by Dept. of Telecommunications , the lenders may not be able to recover funds lent thereby causing irreparable harm to SBI and all other lenders in the consortium.”

Kumar added: “In the meantime, the lenders including SBI are engaging with the companies to examine the possibility of reissue or extending the Bank Guarantee(s) subject of course to all due internal approvals of respective banks”.

On July 23, sources had said that RCOM had informed the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) that while Department of Telecommunications (DoT) has raised a demand for payment of Rs 774 crore on RCOM, the said payment has already been made to DoT vide the encashment of bank guarantees by DoT earlier.

According to sources, RCOM therefore, only needs to renew the encashed bank guarantees, which will be payable only in 2019.

Therefore, RCOM has sought some time and the TDSAT granted an extension on this till August 10, 2018.

Sources said DoT is already sitting on excess bank guarantee encashment of around Rs 540 crore. Also, in a July 3, 2018 order, TDSAT has asked DoT to return additional bank guarantee of Rs 2,000 crore to RCOM.

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Bharti Airtel, VIL shares plunge after Jio unleashes postpaid tariff war

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Jio Bharti Voda

Mumbai, Sep 23 : Shares of telecom majors Bharti Airtel and Vodafone Idea Ltd (VIL) were under pressure on Wednesday after Reliance Jio announced a range of postpaid plans with several benefits, to take on both Airtel and Vodafone Idea in the postpaid segment.

Brokerages retained their bullish stance on Bharti Airtel NSE -7.64 % even after billionaire Mukesh Ambani-led Reliance Jio on Tuesday unveiled postpaid plans, bundling up to 500 GB of data and subscription to Netflix, Amazon Prime and Disney + Hotstar.

Shares of Bharti Airtel, however, traded 5.78 per cent lower at Rs 443.80 at around 11:30 am (IST), while Vodafone Idea traded 5.56 per cent down at Rs 9.68 at around the same time. On the other hand, the benchmark BSE Sensex was up 0.62 per cent at 37,966.

JioPostPaid Plus for mobile customers will have a monthly tariff varying from Rs 399 to Rs 1,499 with different benefits, the company said in a statement.

According to ICICIdirect, the move creates a new layer of tariff-based competition in the segment that was so far unchallenged and lucrative.

“Both Airtel, Vodafone Idea (VIL) are exposed to this risk of churn, the pressure on VIL will be more. The theme of prepaid tariff hike in near term also remains questionable. We await incumbent’s move before incorporating any impact in our financials and valuations. We retain ‘Buy’ on Airtel with an unchanged target price of Rs 700 given comfortable leverage and superior customer quality. However, we maintain ‘Sell’ on VIL with an unchanged target price of Rs 6 per share, given the difficult path ahead to assure survival.”

Reliance Jio added that the main objective of the newly-launched JioPostpaid Plus service is to provide superior services across connectivity, entertainment, and experience.

“There can’t be a more opportune time to introduce JioPostpaid Plus. After having earned the trust of close to 400 million satisfied customers in the prepaid smartphone category, we want to extend our customer obsession to the postpaid category,” Akash Ambani, Director, Jio, said in a statement.

Axis Capital sees this as an attempt by Reliance NSE 1.21 % Jio to add high-Arpu customers and shift some of its customers from prepaid to postpaid.

“There will be no impact on incumbents as only 5 per cent and 8 per cent of Bharti Airtel and VIL customers are on postpaid plans. Most postpaid are enterprise customers who are sticky and incumbents also have comparable plans which can match Jio with some tweaking. Incumbents provide additional features like handset protection. We see it as a positive for the sector as it will attract a new generation of OTT aficionado subscribers which will expand the postpaid market,” Axis said while maintaining a positive stance on Airtel and Reliance Industries.

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Airlines on verge of collapse, may shut if situation doesn’t improve: GoAir to SC

SC deferred the hearing of the case for refund of air tickets booked during lockdown period till September 25

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New Delhi: A day after aviation regulator Directorate General of Civil Aviation (DGCA) informed the Supreme Court (SC) that passengers who booked tickets during lockdown are eligible for refunds, the government recommended that airlines pay 0.5% interest for delayed refunds.

While both Vistara and AirAsia opposed the levy of interest stating that many of their customers prefer credit shell, country’s largest airline IndiGo said it refunded the tickets for the lockdown period in full.

The government also said it is open to considering the interest of any particular segment of passengers if adversely affected.

New Delhi: A day after aviation regulator Directorate General of Civil Aviation (DGCA) informed the Supreme Court (SC) that passengers who booked tickets during lockdown are eligible for refunds, the government recommended that airlines pay 0.5% interest for delayed refunds.

While both Vistara and AirAsia opposed the levy of interest stating that many of their customers prefer credit shell, country’s largest airline IndiGo said it refunded the tickets for the lockdown period in full.

The government also said it is open to considering the interest of any particular segment of passengers if adversely affected.

Meanwhile, GoAir pleaded with the apex court that many airlines were on the brink of collapse and might shut down if If the situation doesn’t improve.

SC has deferred the hearing on airlines’ fare refund case for September 25.

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YSRCP leaders spreading lies on TDP, destroying Amaravati: Chandrababu Naidu

According to Naidu, Reddy has no faith in any religion but only indulges in theatrics to safeguard his vote banks.

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Naidu

Amaravati, Sep 22 : Andhra Pradesh opposition leader and former Chief Minister N Chandrababu Naidu on Tuesday said YSRCP leaders are spreading false information about erstwhile TDP projects with a plan to destroy Amaravati capital city.

“The evil-minded YSRCP leaders were only spreading misinformation campaigns on TDP projects with a plan to destroy Amaravati Capital city,” alleged Naidu.

During an online interaction with senior party leaders and candidates from all the 175 constituencies, he claimed that the ruling party MPs were not fighting for the people’s issues and did not raise the minimum support price issue for farmers in their protests.

Naidu alleged that Chief Minister Y. S. Jagan Mohan Reddy is indulging in vote bank politics, and claimed that he is not condemning attacks on temples, dalits, BCs and minorities.

“The Chief Minister did not bother to visit one single temple and failed to give a strong warning to the perpetrators of these crimes,” he asserted.

According to Naidu, Reddy has no faith in any religion but only indulges in theatrics to safeguard his vote banks.

The TDP supremo claimed that multiple investigations against him were carried out in the past but none of them yielded any proof of wrongdoing.

“Even Reddy ordered many inquiries after becoming CM but he could not find fault with the TDP regime in the past 15 months,” he claimed.

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