Plan to make DoT a holding company
Call to sell frequency with defence
Sensex skids 225 points
Maruti Apr-Aug sales drop 20%
ICI to cut workforce at Rishra factory
MRTPC seeks wider probe into Microsoft
Foreign Exchange, Bullion, Stock Indices

 
 
PLAN TO MAKE DOT A HOLDING COMPANY 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, Sept 22: 
Communication minister Ram Vilas Paswan and telecom chief general managers (CGMs) today drew up the Grand Plan for the corporatisation of the government’s telecom department.

The Department of Telecommunications and Department of Telecom Services will fold into a corporatised entity called the Bharat Sanchar Nigam Limited which will have an independent board of directors and the nine telecom circles as its subsidiary companies. Alternatively, it could be a single company with several divisions.

“There are two options regarding the corporate structure of BSNL. One of them will be finalised soon and a cabinet note will be put up. There are about 65 officers in the rank of additional secretaries; all of them will have to be adjusted,” Paswan said after the day-long brainstorming session.

The board of directors for BSNL will be appointed on October 1, and the existing board dismantled. The employees of DTS and DTO will have three options — to switch to BSNL, stay with the Department of Telecommunications (DoT) or accept separation benefits under a Voluntary Retirement Scheme (VRS).

However, the designations and functions of the CGMs and other officials will remain the same till the new guidelines are issued.

The government also announced that all telecom employees would get a pension out of the Consolidated Fund of India. “The pension scheme has been worked out and it will be provided under the CCS pension scheme,”said Paswan.”

Paswan said the employees would enjoy the benfit of government accommodation for at least two years; facilities under the Central Government Health Service scheme and group insurance benefits would be extended to the employees even in the corporatised entity.

The government will also come out with a new logo for BSNL. Communications minister and state minister for communications will address the transition from DTO/DTS to BSNL

Addressing the meeting of chief general managers of nine telecom circles here today, Paswan said the accounts would have to be closed by September 30 and a new system of accounting along commercial lines would have to start from October 1.

“The accounts and other issue would not be dealt by RBI after October 1 and BSNL will have to tie up with a new bank,” said Paswan. Further, the issue of sales tax for providing services would be decided after the Supreme Court’s decision.

If the government asks BSNL to offer services in less remunerative areas, then the government will compensate for the service.

DoT secretary Shyamal Ghosh was confident that “BSNL will start off as Fortune 500 company.” At present, Rs 95,000 crore Indian Oil Corporation is the only one that enjoys the status.

DTS sources said BSNL is likely to offer one of the lowest telecom tariffs.

The communications ministry has appointed a special committee under senior deputy director general Dilip Sahay to look into the causes behind the recent disruption in telecom services in some parts of the country when employees began an agitation to protest the move for corporatisation.

The committee will submit its report by October 29. Paswan said the government took a serious view of the virtual collapse of the telecom system that was being attributed to sabotage by the striking telecom employees.

Reviewing the matter with the CGMs, Paswan said the reports received by them will be examined thoroughly and stern action taken against those responsible for the situation.

The conference has been called to take a mid-term review of the progress made in development in telecom services including rural development programmes, operations, customer care, new services and information technology.    


 
 
CALL TO SELL FREQUENCY WITH DEFENCE 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, Sept 22: 
India can follow the US experience of auctioning frequency at the disposal of security services and use the auction money to compensate the defence ministry.

The piece of advice came from William E. Kennardy, the chairman of US’ Federal Communications Commission (FCC), America’s top communications watchdog. “India will have to replicate its achievement in information technology in the field of telecommunications. There is political will, and it has to be transformed into reality,” he told a seminar organised by Confederation of Indian Industry (CII).

A plan outlining key areas of mutual cooperation was signed last evening between the Telecom Regulatory Authority of India (Trai) and FCC. It provides for sharing experiences on regulatory issues, competition, inter-connectivity and convergence.

Earlier in the day, Kennardy met communications minister Ram Vilas Paswan, who told him how India took policy and regulatory decisions. He said the telecom watchdog had been recently reorganised and strengthened through an amendment to the Trai Act. A new body, Telecom Dispute Settlement and Appellate Tribunal, has also been set up to provide level playing field in the emerging competitive environment in the telecom sector.    


 
 
SENSEX SKIDS 225 POINTS 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Sept 22: 
Fears over an imminent petro price hike and a plunge in Asian markets earlier in the day sent investors into a selling spree that knocked down the Bombay Stock Exchange (BSE) sensex by 224.83 points to 4032.37.

Operators dumped shares on what was the last day of the current settlement on Dalal Street, hours after profit-warnings from chip-maker Intel sent technology shares sprawling across much of Asia, and pummelled key stock indices in the region.

Tokyo’s Nikkie index closed 493 points lower, the Hang Seng in Hong Kong plummeted 552 points and Singapore’s Straits Times index was off 55 points over its previous finish. The slump followed a 69-point decline in the Nasdaq composite index on Thursday.

Back home, the sensex opened weaker at 4188.47 and closed at 4032.37 in a slide that cost investors a staggering Rs 75,355 crore in lost shareholder wealth — all in the space of five sessions. The market cap of all stocks listed on the BSE shrunk to Rs 6,88,052 crore from Rs 7,63,407 crore last Friday. With today’s 5.28 per cent fall, the 30-scrip index has lost 530 points this week. The BSE-100 declined 110.54 points to 2037.32 from 2147.86.

The wave of selling pounded both old and new economy shares in a session that saw little buying support from local institutions.

The market had expected UTI, which has reportedly picked up a large chunk of shares in Zee Telefilms, to continue buying. When that did not happen, shares came in for severe hammering in the dying hours of trading.

Skittish about the fallout of the increase in oil prices and groping for clues, the bulls rushed to wind up their long positions. Dealers say bourses are likely to remain under pressure if the government raises petro prices by more than 10 per cent.

MTNL was among those which was hit the hardest: its share plunged a whopping 10.29 per cent to Rs 110.10. ACC fell below the Rs 100 mark for the first time to close at Rs 98.05. Even Wipro, which filed for its ADS issue with the SEC, saw its share being battered by 6.27 per cent to Rs 2,456.

In the specified group, 131 shares including 29 from the index, suffered sharp losses. Himachal Futuristic continued to be the most active share with a turnover of Rs 766.90 crore on a total business volume of Rs 5456.54 crore. However, it lost Rs 182.05 to close at Rs 1300 at the close. So did Infosys, which fell by a mind-numbing Rs 508.55 to Rs 7018.80.

Rupee up a shade

The rupee closed a shade higher at 46.18/20 against the dollar today over its previous finish of 46.19/21 despite strong corporate demand for greenbacks, arising out of worries over a sharp increase in the prices of petroleum products. It scaled a high of 45.83 in early trading after reports that SBI was planning a sequel to its Resurgent India Bonds (RIBs). The market feels the issue will help bring in forex inflows.

Indications about SBI’s issue triggered massive dollar unloading among banks. Even exporters sold a part of their holdings. The demand for the greenback remained weak in early deals after the central bank warned banks to refrain from taking speculative positions in the market.    


 
 
MARUTI APR-AUG SALES DROP 20% 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, Sept 22: 
Maruti Udyog sold 20 per cent fewer cars in the first five months of the current financial year, a result of competition from the Korean cousins, and a slower 0.9 per cent growth in industry sales.

It sold 1.32 lakh units (including exports) in April-August, down from 1.64 lakh units sold during the same period last year.

The two wheeler market also grew 8.2 per cent at 14.22 lakh scooters and motorbikes sold during April-August as against 15.39 lakh units sold during the same period last year.

Car sales were marginally higher by 0.9 per cent at 2.44 lakh units during April-August as against 2.42 lakh vehicles in the same period of the last financial year.

However, Hyundai and Daewoo were outracing Maruti and Telco in the market. The two local majors have seen their year-on-year sales in August shrink by 17.5 per cent and 24.6 per cent respectively, according to figures released by Society of Indian Automobile Manufacturers (Siam).

Telco slipped to the fourth position from the third slot with sales of 3,495 units, down from 4,639 units a year earlier. Its marketshare dropped from 7.9 per cent to 6.5 per cent. Hit by a slowdown, total passenger car sales were 8.3 per cent lower at 53,272 units as against 58,138 in August last year.

However, the Korean chaebols were speeding ahead, powered by a strong demand for their small cars. Hyundai Motor India retained its second slot with sales of 7,285 units, up 4 per cent from 7,002 units. The company ended with a 13.6 per cent share as against 12 per cent in the same month last year.

Daewoo Motor India zoomed past Telco to move up to the third slot at 4,497 units, up 57 per cent from 2,862 units last year. Its marketshare was 8.4 per cent, up from 4.9 per cent.

Fiat, the only other small-car manufacturer, also suffered the consequences of weak demand. It sold 709 units, down 64.9 per cent from 2,025 units in the same month last year. Honda’s Siel and Mercedes Benz India were the other car makers which saw their sales machines sputter.    


 
 
ICI TO CUT WORKFORCE AT RISHRA FACTORY 
 
 
BY A STAFF REPORTER
 
Calcutta, Sept 22: 
ICI India Ltd plans to reduce staff strength at its Rishra factory in the current fiscal, as part of its restructuring exercise.

However, of the two divisions of the Rishra factory — paints and rubber chemicals — jobs are likely to be pruned only in the latter. The rubber chemicals division employs around 300 people.

Addressing a press conference here today after the company’s 46th annual general meeting, managing director Aditya Narayan said that the rationalisation is essential to make the unit profitable and cost-competitive.

“We may reduce the workforce in the rubber chemicals division to half,” said Narayan.

He said that the productivity at the paints division is half compared with the company’s other factories.

“We have already undertaken a product rationalisation programme. Some of Rishra’s products are now being produced at the Thane and Mohali factories. We are also revamping our distribution channels to boost sales,” he further added.

The company may also undertake a divestment programme provided there are “clean cases” for doing so.

Regarding the future plans of the company, Narayan said that the company’s main thrust will be on speciality products like decorative paints and industrial paints. Last year the Dulux range of decorative paints witnessed an overall five per cent growth in sales.

“We would like to develop the Dulux brand further,” he said.

The other area of thrust is national starch and chemicals. Trading in national starch adhesives products commenced in May 1999, followed by the commissioning of a 1,200 tpa plant for hot melt adhesives at Thane in January. “We want to widen its portfolio further,” Narayan said.

The company also plans to enter the food flavours and the perfumes businesses through Quest, its 100 per cent subsidiary. Quest has a £ 1 billion business worldwide.    


 
 
MRTPC SEEKS WIDER PROBE INTO MICROSOFT 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, Sept 22: 
The Monopolies and Restrictive Trade Practices Commission (MRTPC) today asked the Director General (Investigation and Registration) to widen the probe into Microsoft’s business practices, to ascertain whether the company was indulging in monopoly practices in India.

Upbraiding the DG for not carrying out a complete investigation, the commission, in an order, said the DG’s report does not make a conclusive case to charge Microsoft with violating the MRTP Act 1969 and the International Copyrights Treaties. It said his preliminary report has not established clearly whether the provisions of the Act were attracted when restrictions were imposed for the use of Microsoft’s software in terms of the company’s End Users’ Licence Agreement (EULA).

The Commission has directed the DG to complete his report by December 4 on a priority basis and the case is listed for hearing on the same day.

MRTPC chairman Justice B.M. Lal said, “No doubt when restrictions have been imposed for the use of Microsoft’s software in terms of the EULA, the question arises as to whether the provisions of Monopolies and Restrictive Trade Practices Act 1969 are attracted...” The Commission asked the DG to probe whether Microsoft’s EULA was violative of the MRTP Act, or the Contract Act, in case it was protected by International Copyrights Treaties.

“In our view, investigation on these lines has not been proceeded with by the DG and no material has been collected in this regard,” the bench said.

R. D. Makheeja, appearing on behalf of Microsoft, said the Indian company does not develop any software or manufacture any product as it has no authority to prescribe prices of the software and other products of Microsoft Corporation, USA. The Indian company is only engaged in the promotion and marketing of software and other products manufactured by the parent.

The DG’s investigation came on a complaint by a Mumbai resident L. J. Shah, alleging monopolistic and restrictive trade practices by Microsoft.    


 
 
FOREIGN EXCHANGE, BULLION, STOCK INDICES 
 
 
 
 

Foreign Exchange

US $1	Rs. 46.21	HK $1	Rs. 580*
UK £1	Rs. 67.11	SW Fr 1	Rs. 26.65*
Euro	Rs. 40.11	Sing $1	Rs. 25.95*
Yen 100	Rs. 43.10	Aus $1	Rs. 24.65*
*SBI TC buying rates; others are forex market closing rates

Bullion

Calcutta	Bombay

Gold Std (10gm)	Rs. 4575	Gold Std (10 gm	4510
Gold 22 carat	Rs. 4320	Gold 22 carat	4170
Silver bar (Kg)	Rs.7975	Silver (Kg)	8020
Silver portion	Rs. 8075	Silver portion	8025

Stock Indices

Sensex	4032.37		-224.83
BSE-100	2037.32		-110.54
S&P CNX Nifty	1266.45		-63.40
Calcutta	114.87		-4.06
Skindia GDRNA	675.83		-4.38
   
 

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