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Vodafone Idea to raise tariffs from December 1

Mobile data charges in India are by far the cheapest in the world even as the demand for mobile data services continue to grow rapidly, the company said.

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Vodafone, Idea

New Delhi, Nov 18 : Vodafone Idea Ltd (VIL) on Monday said that it will “suitably increase the prices of its tariffs” from December 1.

“The acute financial stress in the telecom sector has been acknowledged by all stakeholders and a high level Committee of Secretaries (CoS) headed by the Cabinet Secretary is looking into providing appropriate relief,” the company said.

Mobile data charges in India are by far the cheapest in the world even as the demand for mobile data services continue to grow rapidly, the company said.

Airtel and Vodafone Idea have posted a combined loss of Rs 74,000 crore in Q2 by provisioning for the AGR pending dues. Vodafone has hinted at not being able to remain as a going concern if relief does not come for the sector.

VIL said it is speedily expanding both its coverage and capacity and is well on track to offer 4G services to 1 billion Indian citizens by March 2020.

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Business

BPCL privatisation roadshows to begin overseas from Friday

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Bharat Petroleum Disinvestment

New Delhi, Dec 12 : The privatisation process of state-run BPCL will start this week with roadshows for its strategic stake sale scheduled from Friday in London, the US and Dubai led by DIPAM and oil ministry officials.

The officials will meet the prospective investors and will try to sell BPCL as an entity, which will give them an entry into the lucrative oil refinery as well as retail fuel market in India which are touted to be highly remunerative.

The investors’ feedback and concerns will be used to prepare the expression of interest for BPCL sale, said sources.

Though it still not has been made public, government sources say the world’s largest oil company, Aramco, may make up its mind to participate in the disinvestment of BPCL where government intends to sell its entire 53.29 per cent stake to a strategic investor now that its listing is over. Saudi Aramco tops with $2 trillion in valuation after the listing.

Finance Minister Nirmala Sitharaman has indicated that BPCL disinvestment may be completed in the current financial year.

Any company eyeing BPCL will have to pump in close to Rs 1 lakh crore (about Rs 60,000 crore for the government’s stake and the balance for open offer), said market sources.

The government’s stake is worth over Rs 60,000 crore at prevailing price of BPCL shares on the BSE. If the buyer has to further acquire a 25 per cent share in an open offer as per the takeover code, the total amount will rise close to Rs 1 lakh crore which will be very high for any investor.

On its part, the Department of Investment and Public Asset Management (DIPAM) is working out a plan to offload the entire government equity to a strategic partner, possibly a large overseas oil entity like Saudi Aramco, Total, ExxonMobil or Shell.

However, with oil market globally facing a slowdown with demand not picking up despite supply squeeze, the appetite for a large acquisition becomes difficult.

BPCL operates four refineries at Mumbai, Kochi, Bina in Madhya Pradesh and Numaligarh in Assam with a combined capacity to convert 38.3 million tonnes of crude oil into fuel.

It has 15,078 petrol pumps and 6,004 LPG distributors across the country. The government proposes to raise Rs 1.05 lakh crore from disinvestment in the current financial year. It had exceeded asset-sale targets of Rs 1 lakh crore in FY18 and Rs 80,000 crore in FY19.

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Govt rules out BSNL, MTNL disinvestment

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MTNL and BSNL

New Delhi, Dec 12 : The government on Thursday ruled out any plans to sell stake or disinvestment of ailing telecom PSUs — Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) in the Parliament while fixing a target of Rs 200 crore and Rs 300 crore for them from their asset monetisation in current fiscal.

While the specific assets to be monetised during the current fiscal year have yet not been identified, the target for asset monetisation during the current fiscal year for BSNL and MTNL is Rs 200 crore and Rs 300 crore respectively, telecom minister Ravi Shankar Prasad said in a written reply to Rajya Sabha.

“(There is) no proposal for disinvestment of BSNL and MTNL is under consideration”, he said.

State run BSNL’s losses for the year 2018-19 has doubled to nearly Rs 15,000 crore from 2017-18 and revenue has also dwindled to Rs 19,321 crore in fiscal 2019.

In a written reply to Rajya Sabha, Telecom Minister said MTNL operates in metros of Delhi and Mumbai while BSNL operates in rest of India. The Cabinet has approved the revival plan for BSNL and MTNL which inter-alia, includes in-principle approval for merger of BSNL and MTNL. The merger will benefit BSNL/MTNL through pan-India footprint, synergy in operations, reduced fixed costs and overheads, sharing of technical infrastructure and enhanced Enterprise Business.

As per the figures given by him in 2018-19, BSNL posed a loss of Rs 14,903 crore and the loss was Rs 7,993 crore in 2017-18 and Rs 4,793 crore in 2016-17. MTNL posted a loss of Rs 3,398 crore in 2018-19, Rs 2,971 crore in 2017-18 and Rs 2016-17 as well.

The revenue of BSNL in 2017-18 was Rs 25,071 crore and Rs 31,533 crore in 2016-17. MTNL’s revenue was Rs 3,552 crore in 2016-17, Rs 3,116 crore in 2017-18 and Rs 2,607 crore in 2018-19.

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7% drop in telecom revenues in 2018-19: Government

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Mobile tower

New Delhi, Dec 12 : The revenue from the telecom sector to the government has seen a seven per cent drop in fiscal 2019, Rajya Sabha was told on Thursday.

The Communications Ministry said in a written reply in the Rajya Sabha: “As per the information available with the Telecom Regulatory Authority of India (TRAI), the Adjusted Gross Revenue for the telecom service sector stood at Rs 1,44,681 crore in 2018-19 as against Rs 1,55,680 crore in 2017-18, thereby showing a decrease of 7.06 per cent.

“The decline in the Adjusted Gross Revenue is not sufficient to conclude below cost pricing by the telecom service providers.”

The Average Revenue Per User (ARPU) has come down from Rs 124.85 in 2017-18 to Rs 71.39 in March 2019, the reply said.

In another reply, Minister Ravi Shankar Prasad said the Department of Telecom has held a number of meetings with the Telecom Service Providers in the recent past, regarding the issues faced by the Telecom Sector.

A Committee of Secretaries (CoS) chaired by Cabinet Secretary also considered issues related to the Telecom Sector.

Based on the recommendations of the CoS, the Government has permitted deferment of the payment of the spectrum auction instalments due for 2020-21 and 2021-22 for mitigating the financial stress being faced by the telecom Services Sector, whereby, Department of Telecommunications will give an option to the Telecom Service Providers to defer payment of the spectrum auction instalments due for 2020-21 and 2021-22, either for one or both years.

These deferred amounts will be spread equally over the remaining instalments to be paid by Telecom Service Providers, without any increase in the existing time period specified for making the instalment payments.

Interest as stipulated while auctioning of the concerned spectrum will, however, be charged so that Net present value (NPV) of the payable amount is protected.

As per the current policy, the Telecom Service Providers will continue to securitise the next payable annual instalment by a Financial Bank Guarantee (FBG) of an amount equivalent to the instalment, Prasad said.

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