Govt to explain mobility for basic telecom firms
Taj group bid for Carlyle fails
ONGC arm eyes Algerian deal
Centre to review progress of power reforms this week
UB to unleash ad blitz for Kingfisher wear

 
 
GOVT TO EXPLAIN MOBILITY FOR BASIC TELECOM FIRMS 
 
 
FROM M RAJENDRAN
 
New Delhi, Jan 7: 
The communications ministry will have a lot of explaining to do when it faces a sceptical Parliamentary standing committee on telecommunications over giving basic operators — Bharat Sanchar Nigam (BSNL) and private companies — the freedom to offer limited mobility.

This is the only agenda for Tuesday’s meeting, which has been convened by Somnath Chatterjee. As the chairman of the committee, the CPM MP has already written a letter to Telecom Commission, asking for details on limited mobility.

The Cellular Operators Association of India (COAI) had recently requested him to intervene in the matter and to ensure that the government offers a level playing field for fixed and mobile firms. “BSNL and private firms can offer mobility, provided they pay the same licence fee and work under similar terms and conditions,” a cellular operator in Delhi said.

Chatterjee has sent COAI’s letter to the Telecom Commission, which has been asked to explain if allowing limited mobility to basic firms would hit the business of cellular operators.

Basic operators keen on offering the facility do not want to pay an additional fee. They argue that a delay in taking a decision, or the imposition of a separate fee, will raise the charges of their planned limited mobile service.

“Basic operators can offer wireless in local loop (WiLL) services under their existing licences. It is a technology option, not a new service, just as internet services offered by mobile operators cannot be treated as a new service,” sources in BSNL said.

Fixed telecom operators led by the Association of Basic Telecom Operators (ABTO) have promised to offer mobile telephone service to consumers at Rs 1.20 for a three-minute call. “If limited mobility based on Code Division Multiple Access (CDMA) technology is allowed, we can offer low-cost mobile services,” ABTO president Rajeev Mehrotra said.

The views of Telecom Commission, said a member, will be presented to the standing committee, whose suggestions in turn, will be sent to the Telecom Regulatory Authority of India (Trai). The watchdog is already examining the issue in detail.

“We are examining the technical aspects of limited mobility service. One must remember that tempers ran high at open-house sessions. Our decision will reflect the short term and long-term implications for consumers, the service and the industry,” Trai sources said.

The regulator is likely to submit its recommendations by the end of this month on the use of WiLL by basic line operators to offer mobile telephony at the cost of a fixed phone call. However, the government will have the final word, irrespective of the recommendations made by Trai under the New Telecom Policy unveiled in 1999.

   

 
 
TAJ GROUP BID FOR CARLYLE FAILS 
 
 
FROM SATISH JOHN
 
Mumbai, Jan 7: 
The Taj group of hotels has failed in its ambitious bid for New York’s Carlyle Hotel.

The Taj hotels promoted by the Indian Hotels Co of the Tatas made a bid for Carlyle Hotel, raising eyebrows in the domestic hospitality industry.

“We have missed the opportunity,”an Indian Hotels’ official spokesperson said. However, the Taj group is unfazed by the setback. “We are looking at other properties in the vicinity,” the official said. If the Carlyle Hotel acquisition had happened, the deal would have been the biggest in the Indian hotel industry.

The Carlyle Hotel would have been a prize catch for the Taj group as the 70-year old hotel is a preserve of presidents, prime ministers and film stars.

Sources in the company attribute several reasons for the failed overture for Carlyle. One of the prime reasons was that government approvals took some time to come. Carlyle hotel was valued at around $ 140 million (Rs 680 crore). Arranging that kind of money by an Indian company is time consuming. Moreover, in view of the size of the bid the group was keen on a joint bid with a partner. Sources in the company also pointed out that Reserve Bank of India delayed to give approvals.

Recently, it was reported in the press that Taj had roped in Jaipur Trust which owns five Taj properties in Rajasthan and US-based Rothschild Trust to partner them in the Carlyle acquisition.

Taj officials, while not confirming the deal, say the partners could change for any acquisition it plans in the upper crust Manhattan area.

“The new gameplan for the Taj hotel chain is to grow at a rapid pace,” R K Krishna Kumar, managing director of Indian Hotels told newspersons, recently, during the unveiling of the new lobby of the Taj hotel here.

According to him, the business review committees set up by the Tatas to monitor every sector, where its group companies have a presence, set the Taj group an ambitious growth target, which applies both for the topline as well as bottom line growth.

   

 
 
ONGC ARM EYES ALGERIAN DEAL 
 
 
FROM R. SASANKAN
 
New Delhi, Jan 7: 
After two deals with Iraq and Russia, ONGC-Videsh is now negotiating a production-sharing contract with Algeria, for a lucrative area which has yielded oil and gas in the past.

Indications are that ONGC-Videsh may rope in Indian Oil as a partner. IOC has been desparately looking for equity oil overseas and the Algerian venture will be its first overseas investment in the upstream sector. ONGC-Videsh has received offers from Indonesia’s Pertamina for joint exploration efforts .

Being a national oil company, ONGC-Videsh has limitations in striking deals and cannot compete with private oil firms in business tactics. However, its overseas strategy has been to deal with state-owned oil companies of countries with whose governments India has good relations.

Although ONGC did not have any major oil discovery in recent years, its search for equity oil overseas has, of late, met with success. The two deals with Iraq and Russia should yield 10 million tonnes of oil per annum by 2010.

Russia has so far signed only three production sharing contracts, which includes the one with ONGC-Videsh. It is being operated by Exxon and has one more Japanese partner. The deal is now awaiting clearance from the foreign parnters. The Russian government appears to have favoured ONGC-Videsh though there were other competitors like British Petroleum trying for a stake.

Sources say Indonesia may offer as many as eight exploration blocks to ONGC-Videsh. Indonesia is considered prolific in hydrocarbon reserves and it should not be difficult for ONGC-Videsh to find partners to share the risks.

The first major success of ONGC Videsh overseas has been in Vietnam where it discovered a gas field in partnership with British Petroleum. Negotiations with Petro Vietnam for sale and purchase agreemets have almost been concluded. ONGC’s stake in the project is now estimated around $ 185 million.

   

 
 
CENTRE TO REVIEW PROGRESS OF POWER REFORMS THIS WEEK 
 
 
BY SUTANUKA GHOSAL
 
Calcutta, Jan 7: 
The Union power ministry has convened a meeting with the state power secretaries and chairmen of state electricity boards on January 12 to discuss the progress of power sector reforms and the allotment of funds under the accelerated power development programme (APDP).

The government, which has provided Rs 1000 crore in the year 2000 under the APDP, has earmarked Rs 3,000 crore under the programme for 2001-03.

G. D. Gautama, chairman of the West Bengal State Electricity Board said, “This is a crucial meeting where the SEBs will be asked to spell out when they will sign an agreement with the central government for carrying out power sector reforms. The disbursal of funds will depend on progress on this front.”

The ministry of power has directed the Central Electricity Authority (CEA) to work out a customised prescription for power sector reforms for each state.

The whole exercise is expected to be completed within a couple of months. All the states now follow different reform formulas.

The funds under the APDP are released to states as additional central Plan assistance for financing renovation and modernisation of old power plants, upgradation of distribution network and metering and energy audit activities.

Gautama said, “Since APDP is constituted to induce the states to undertake reforms in the power sector, priority will be given to projects from those states who commit themselves to a time-bound programme of reforms — setting up of a state electricity regulatory commission to fix tariff, unbundling of SEBs and corporatisation of generation, transmission & distribution and privatisation of each zone in a phased manner.”

Alarmed by the mounting losses of the SEBs, the CEA has set a target for all states of achieving 100 per cent metering by December 2001.

Though the SEBs quote T&D losses of 22-26 per cent, the figure is expected to be much higher, hovering around 40-45 per cent in most states.

For example, the sample energy audits which have been conducted by the World Bank for the Orissa State Electricity Board and Rajasthan State Electricity Board have revealed that the T&D losses are nearly 40 per cent.

The WBSEB has submitted a Rs 718 crore scheme to the Power Finance Corporation for 100 per cent metering and the latter has already sanctioned a portion of it, Gautama said.

   

 
 
UB TO UNLEASH AD BLITZ FOR KINGFISHER WEAR 
 
 
BY A STAFF REPORTER
 
Calcutta, Jan 7: 
United Breweries (UB) has decided to promote its Kingfisher brand of apparel at the national level. A promotional campaign will be unleashed in the print media from February.

“We are serious about the Kingfisher line of clothes and we do not treat it as a surrogate business,” said Vijay Mallya, chairman, United Breweries.

The clothes business is an extension of the company’s flagship brand, Kingfisher. “The sports apparel represent joy, jest, youthfulness, Kingfisher’s image,” said Shekhar Ramamurthy, UB’s divisional vice-president.

Today, United Breweries sponsored the Kingfisher Derby for the first time in this city which was so far restricted to only in Mumbai and Bangalore. This is part of the company’s brand promotion exercise targeted towards increased market share in the city.

   
 

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