Pre-paid cellular cards for less than Rs 300
Ulka to brew drink-tea campaign
Great Eastern on recruitment drive
VSNL direct-to-home debut by Dec
Selloff on backburner
Focus on north-east tele-density
Fetters on private insurers
Market wise men to take stock today
Growth in exports tops target, touches 20%
Procter net climbs to Rs 21 cr

New Delhi, May 1: 
For people priced out of the cellular loop, the wait may be over. The Telecom Regulatory Authority of India (Trai) has asked mobile service providers to offer pre-paid cards of smaller denominations, preferably with a value of Rs 300 or less, in an effort to raise the number of subscribers.

The regulator says these cards should be valid for at least a month. The terms and conditions under which they are issued also have to be changed to give users more leeway.

At present, pre-paid cards of various denominations and validity periods are available in the market, but Trai wants cellular operators to issue smaller value cards which can be purchased by low-use subscribers. It is also unhappy with the ridiculously short validity periods of the cards sold now.

The authority feels cards which have a smaller value will benefit low-use subscribers and visitors who would prefer this option over the roaming facility offered by operators.

Cellular firms have been asked to charge ‘only a reasonable mark-up’ when they replace lost/ damaged SIM cards. The charges vary considerably across service providers who appear to rake in much more than the cost. The regulator has evidence that the cost of SIM cards to operators has declined in the recent past.

Trai will have to be informed about the amount actually charged by service providers as part of their reporting requirement. This will help it monitor charges and intervene in cases where there are major deviations from the cost.

The regulator, in the same order, has said the unused amount at the end of the validity period of a pre-paid card should be carried over if it is renewed within a pre-specified period.

This time is generally referred to as the grace period in industry jargon. Service providers will have to mention the grace periods they offer to their subscribers in their reports sent to Trai.

In another significant decision to protect customers, Trai has ordered that pre-paid cards should prominently and clearly specify the amount which can be used to make calls and the portion which is in the nature of a service charge.

At present, these cards have charges which are not linked to airtime — the price you actually pay for talking. As a result, customers do not know how much of the amount they pay is for things other than the time spent chatting.


Calcutta, May 1: 
Ulka has bagged the creative contract for generic promotion campaign of tea that starts from June 1, while the Mumbai-based Madisons has grabbed the public relations assignment.

The tea industry will spend Rs 6 crore in the current financial year on a campaign that will mainly focus on the health aspects of the beverage as part of a Rs 16-crore outlay fixed for three years.

What tipped the scales in Ulka’s favour was that the agency had conceived Doodh — National Dairy Development Board’s highly successful promotional campaign which lured people to drink milk. “Since the generic promotion of tea is similar, Ulka has bagged the contract,” tea industry officials said.

The generic promotion campaign, to be launched simultaneously in Delhi, Mumbai, Calcutta, Bhopal, Chennai, Lucknow and Gujarat, will continue till October, and will be followed by a media campaign. It will rope in doctors who will talk about health aspects that have not been projected enough.

“Around 50 per cent of the Rs 6 crore which has been set aside for the promotion campaign this year will come from the government as assistance,” a senior tea industry official said.

The campaign will be city specific. For example, in Delhi tea will be projected as an anti-oxidant, in Mumbai it will be promoted as an agent which prevents cardio-vascular disease and in Calcutta, as an anti-carcinogenic agent.

The blitz will focus on people below 24 years of age, who constitute around 60 per cent of the country’s population and are seen as potential tea drinkers. R.S. Jhawar, chairman of Indian Tea Association, said the young generation was opting for soft drinks and alcohol, which had shrunk the market for tea.

Advertisements will be unleashed in the print and electronic media, telling customers how tea can strengthen their defence mechanism by reducing the impact of oxidants. At the same time, Jhawar said the industry will concentrate on producing more high-grade tea, which will not only help attract more customers but also fetch better prices.

The position of the industry, he said, had remained comfortable until a few years back with the consumption growing at a faster rate than the increase in population — an indication that absolute and per capita consumption of were increasing. However, the rate has halved in recent years and was equal or below that of population growth — a sign that per capita consumption has not changed, or declined marginally.

Raising domestic consumption has become the most important challenge for the industry. Last year, in spite of lower production, prices in the domestic market did not go up as expected because of the low domestic consumption, which has grown by 2 per cent, a percentage point less than the targeted rate.


Calcutta, May 1: 
The loss-laden Great Eastern Hotel has started fresh recruitments, even as its privatisation is still hanging fire.

In the past few weeks, the hotel has recruited an accounts officer and is in the process of recruiting a chief engineer.

The fresh recruitments, along with the slow progress on the privatisation front, has created resentment among the hotel’s employees.

“The hotel has decided to stop taking business from July 1. As it is, the current business is in a very bad shape. The government has decided not to renovate the hotel and we are getting salaries from grant-in-aid. How can the hotel recruit people in such a situation,” questioned an infuriated Atiar Rahman, secretary of the Great Eastern Hotel Staff and Workers Association.

Hotel sources said Great Eastern will recruit people as and when required. Barin Basu director of West Bengal Tourism Development Corporation said that those who have been appointed are more than 60 years of age and on a contract of three months. “Their contract will be reviewed after three months and extended further,” he added.

Tourism minister Manab Mukherjee and tourism secretary Pranab Ray were, however, not available for comment.

In a letter to U. C. Sen, member secretary of Great Eastern, tourism secretary Pranab Ray has stated, “The situation will be reviewed by the department of tourism towards the end of May and further instructions will follow.” The government had decided to hand over the hotel to the French firm Accor Asia Pacific. Earlier, state tourism minister Manab Mukherjee had told The Telegraph that “everything will be settled within April.”

The tourism secretary further added, “Since the process of finalising the memorandum of understanding with the selected party for the transfer-on-lease of the Great Eastern Hotel for reconstruction and management is likely to take some more time, bookings in the hotel may be accepted for the period up to June 30, 2001.”

The hotel is not accepting any bookings after July even though it has received several enquiries. Basu said, “We have sent the draft memorandum of understanding to Accor. They will communicate with us in the middle of May. A decision will be taken after that.”

However, the hotel’s 525 employees are upset with the government’s delay on the fate of Great Eastern. The employees feel the privatisation of hotel seems to have been put on the backburner, with the state government failing to give a deadline when French firm Accor Asia Pacific will take over the hotel.


Mumbai, May 1: 
Videsh Sanchar Nigam Ltd (VSNL), the country’s leading internet service provider, has drawn up plans for a big splash in the country’s direct-to-home (DTH) services.

The nationwide launch is planned between October and December. Major television channels such as Rupert Murdoch’s Star Network, Subhash Chandra’s Zee Network, Kalanidhi Maran’s Sun TV and a handful of networks from the south have evinced interest in VSNL’s USP of a neutral platform.

“Last month, we had invited them to a seminar VSNL had organised in cooperation with Intelsat, a leading satellite operator. The interest shown by networks was encouraging,” company director (operations), Amitabh Kumar, told The Telegraph.

The DTH foray will cost VSNL Rs 500 crore, of which Rs 100 crore will be invested in setting up ground facilities and Rs 400 crore in infrastructure at customers’ end, such as set-top boxes and dish antennas. Talks are under way with global majors like NEC, Scientific Atlanta and Gillette Global Network to procure DTH equipment, Kumar said.

The company has held out the prospect of a large order —one lakh dish antennas — to win price reductions from equipment suppliers. The entire strategy is based on a report McKinsey prepared for Nasscom. According to the study, there could be a million subscribers for DTH services once it is available.

While a dish antenna will cost it Rs 12,000, VSNL intends to charge a maximum of Rs 800 from each subscriber. The company will provide internet access through its dish antennae in addition to regular transmission of TV programmes. The company hopes customers, who now pay Rs 1000 on an average every month for dial-up internet access, will lap up the DTH service.

DTH guidelines require a service provider to set up an uplink earth station within 12 months of getting the licence, but VSNL has claimed the infrastructure it needs is already in place.

The DTH plan follows the company’s recent attempts to enter basic and cellular services. It has come at a time when is faces a revenue slump because of the government’s decision to allow voice telephony over the internet — a much cheaper option for users.

The international telecom carrier, sitting on Rs 5000 crore in cash reserves, has lined up a Rs 2,000-crore capacity-expansion plan for 2001-02.


New Delhi, May 1: 
The BJP government has decided to slow down the divestment process in Videsh Sanchar Nigam Ltd (VSNL) till the core group of secretaries takes a decision on retaining Credit Suisse First Boston (CSFB) as the global advisor to the issue.

CSFB’s credibility suffered after Securities and Exchange Board of India (Sebi), the capital market watchdog, started a probe into allegations that the foreign institutional investor (FII) was involved in the post-budget stock crash. Several other FIIs are also being investigated by the market regulator.

Top officials of both the disinvestment and finance ministries are in favour of the VSNL selloff being put on the backburner so that fresh controversies do not crop up. There are also moves to “educate the public about the level of transparency being maintained.”

The government wants to play safe on the VSNL issue as allegations have already been voiced by its own MPs that the blue chip telecom giant’s scrips were hammered days before bids for the state-run firm closed.

One of those who made such allegations was Kirit Somaiyya who has now been inducted into the Joint Parliamentary Committee probing the stock market crash.

Somaiyya has always maintained that interested market players, including foreign players, have been involved in hammering stock prices of PSUs that are earmarked for selloff.

At this moment, the BJP government is in no mood to get entangled in any fresh controversy involving foreign financial institutions.

Last year, it had been accused of favouring FIIs by issuing a circular that permitted them to route investments into India through shell firms in Mauritius.


New Delhi, May 1: 
Communications minister Ram Vilas Paswan has asked the Telecom Commission to prepare a time-bound programme to enhance the telecom infrastructure in north east, particularly the Assam circle.

The Telecom Commission, in its recent review meeting, took into account the low tele-density and in particular the low penetration of village public telephones.

“The minister has pointed out that north-east is one of the populated part of the country but parts of it are still inaccessible due to the hilly terrains and telecommunications is the ideal mode to connect these areas. The VPT targets in this part of the country has been poor and need to be improved at a faster pace,” sources in the Telecom Commission said.

“A separate unit in the department of telecommunications may be set up to monitor the progress of VPT targets by Bharat Sanchar Nigam Limited and also the private operators,” the sources said.

“The meeting primarily focussed on devising development parameters for the north-east region, including the Assam circle,” sources said.

VPT target goes awry

Private telecom operators have failed to show up in the village public telephony (VPT) arena, according to a probe committee report.

The committee notes that Tata Teleservices in Andhra Pradesh that was to provide 9,635 VPTs latest by September 30, 1998, which is the first year of its operations, has not provided even a single VPT as yet.

Reliance Telecom in Gujarat and HFCL Infotel Ltd in Punjab were to provide 8,635 and 5,442 VPTs respectively by September 1998 but have not provided even a single VPT so far.


New Delhi, May 1: 
The Insurance Regulatory and Development Authority (IRDA) has barred insurance companies promoted by big business houses from parking more than five per cent of funds in their group companies.

The new IRDA Investment (amendment) Regulations 2001 released here yesterday said: “An insurer shall not have investments of more than five per cent in aggregate of its controlled funds in the case of life insurer, or five per cent in aggregate of its assets in case of non-life insurer, in companies belonging to the promoters’ group.”

The regulation is subject to IRDA’s prudential norms that an insurer should not invest more than 10 per cent in share capital, free reserves and bonds and debentures of a particular company, group or an industrial sector, at any point of time.

The new norms assume significance for most private companies, including Reliance General Insurance, Tata AIG General Insurance, Birla Sun Life, Royal Sundaram or even HDFC Standard Life and ICICI Prudential Life Insurance, have several profitable group companies qualifying for the IRDA specified investment grades.

The IRDA norms are, however, flexible towards the old insurance companies, including Life Insurance Corporation (LIC) and the four former subsidiaries of General Insurance Corporation (GIC).

LIC would be allowed to hold 20 per cent of shares, debenture or bonds issued by a company or five per cent of LIC’s controlled funds, whichever is less.

The four former subsidiaries of GIC would be allowed 20 per cent exposure in equities of a company or 10 per cent of their total assets, whichever is less.

Overall, life insurance companies are allowed to invest up to 15 per cent of their funds in equities and other unapproved securities, 20 per cent in highest safety AAA rated instruments, 15 per cent in infrastructure and social sector and a minimum 50 per cent in central and state government securities.

In case of non-life companies, a maximum 25 per cent of their total assets are allowed to be invested in equities, while total investment in approved and unapproved securities could go up to 55 per cent.

General insurance companies have to invest a minimum 10 per cent in infrastructure and social sector, minimum five per cent in housing sector and a minimum 50 per cent in central and state government securities. To provide flexibility and ensure safety, the IRDA norms said, “investment in equity shares listed in a recognised stock exchange should be made in actively traded and liquid shares (its trading volume does not fall below 10,000 units in any trading session during the last 12 months or trading value exceeds Rs 10 lakh in any trading session).”

IRDA has also made it mandatory for insurers to furnish details of investments in instruments other than approved securities every quarter.

“Every insurer shall report to the authority forthwith the effect or the probable effect of any event coming to his knowledge, which could have material adverse impact on the investment portfolio and consequently on the security of policyholder benefits or expectations,” IRDA said.


Mumbai, May 1: 
The inter-exchange group on risk management set up by the Securities and Exchange Board of India (Sebi) will meet on Wednesday to review the prevailing market situation.

While marketmen expect the group to recommend lifting of ban on short sales, Sebi officials say the meeting may not have short sales on its agenda. “It is unlikely to be discussed,” Sebi sources said.

However, the market grapevine is optimistic that the controversial short sales ban may eventually come up for discussion during the meeting. Sources, however, argue that after finance minister Yashwant Sinha’s complete support for Sebi’s recent moves including the ban on short sales during the parliamentary debate, it is highly unlikely that Sebi will risk lifting the ban.

In fact, one of the reasons that propped up the sensex yesterday, was rumours of Sebi developing second thoughts on the ban on deferral products like Automated Lending and Borrowing Mechanism (ALBM), and Borrowing and Lending Securities Scheme (BLESS).

However, Sebi officials hotly denied any such move. “It is no longer within the purview of the committee, the governing body will have to take a decision on the ban,” the official said.

Senior Sebi officials described tomorrow’s meeting as a routine review undertaken by the market regulator. However, with a semblance of stability returning to the market, it is felt that Sebi should now take the lead in rolling back the additional volatility margins and the ban on short sales.


New Delhi, May 1: 
India has surpassed its export growth target of 18 per cent for 2000-01 and notched up a healthy 20 per cent that is almost double of what the country achieved in the previous financial year. In 1999-2000, the country managed to register a mere 11 per cent growth in exports.

Exports during the last financial year were valued at $ 44.1 billion, 19.83 per cent higher than the $ 36.8 billion achieved in 1999-2000, an official release said here.

In rupee terms, exports were Rs 2,01,674.10 crore last year, 26.39 per cent higher than the value of exports in the previous year.

Commerce and industry minister Murasoli Maran said the outstanding performance of the exporting community, along with the facilitating environment, had made it possible to attain this growth.

He, however, warned that continuous efforts were required to maintain the high growth rate.

“There is no room for complacency. There should be concerted and sustained efforts to maintain, if not accelerate this high growth rate so as to achieve our vision of attaining at least one per cent share of the global trade in the shortest possible time,” he said.

Exports during March this year increased by 18.53 per cent at Rs 1,9941.07 crore over the previous year’s performance of Rs 16823.38 crore.

Growth in dollar terms was 10.82 per cent at $ 4277.32 million compared with $ 3859.80 million during March last year.

Imports during the period April-March 2000-01 increased by 0.27 per cent at $ 4,9843.00 million, compared with $ 49709.83 million during the same period last year.

Oil imports during the financial year 2000-01 were valued at $ 15653.29 million, which was 62.29 per cent higher than $ 9645.42 million in the previous comparable period.

Non-oil imports were valued at $ 3,4189.71 million.


May 1: 
Procter and Gamble Hygiene and Health Care Ltd has announced a 20 per cent rise in net profit, in its unaudited financial results for the third quarter ended March 31, 2001.

Net profit rose 20 per cent to Rs 20.82 crore, up from Rs 17.36 crore in the previous corresponding period. Sales stood at Rs 101 crore in the third quarter of the current fiscal, as against Rs 130.7 crore last year, which included sales of shampoos and Clearasil.

The company registered a 5.5 per cent growth in sales in the core businesses of feminine hygiene and health care in the quarter under review, over the previous comparable quarter.

DSQ Software profit

The Chennai-based IT company DSQ Software Ltd reported 28 per cent growth in its net profit during the first quarter ending March 31, 2001.

According to the quarterly results released by the company, the net profit during the period touched Rs 28.61 crore as against Rs 22.4 crore during the same period last year.

Income from software services registered a 30 per cent growth to touch Rs 117.25 crore during the quarter as compared with Rs 90.22 crore in the corresponding quarter last year. The company’s total expenditure went up to Rs 73.94 crore from Rs 55.74 crore in the first quarter of 2000.

MRF profits plunge

Tyre major MRF Ltd reported a nearly 75 per cent fall in its net profit, which dipped to as low as Rs 4.28 crore in the quarter ended March 31, 2001, from Rs 16.65 crore in the corresponding quarter of the year 2000.

Net income from sales however fell only by 4.8 per cent to Rs 524.61 crore during the period from Rs 551.06 crore in the first quarter of 2000. Total expenditure of the company came down to Rs 481.57 crore during the quarter, from Rs 484.4 crore in the previous corresponding quarter.

Snowcem profit up

Exterior paints company Snowcem India, today announced a 21 per cent higher net profit at Rs 17.87 crore on a 37 per cent rise in sales at Rs 209.61 crore.

The company also said it had acquired 42,500 equity shares of Rs 100 each of Pelican Paints Ltd at Rs 10 per share and 3.5 lakh shares of Rs 100 each of Killick Halco Ltd at Rs 83 per share, making the two companies its subsidiaries, a company statement said.

Samtel net rises 11%

Colour picture tube maker Samtel Colour today reported an 11 per cent growth in net profit at Rs 41.56 crore even as sales declined marginally to Rs 666.54 crore for the 12 months ended March 31, 2001.

The company posted Rs 37.31 crore net profit over Rs 669.9 crore sales turnover during the previous fiscal, it said in a statement.

“CPT sales collapsed in the fourth quarter last fiscal, as colour television makers started correcting the pipeline (inventory build up). This correction is likely to be completed in the current quarter,” it said. In Q3 last fiscal, CTV and CPT production had gone up in anticipation of higher demand during the festival season. It now appears that the strong sales performance of tubes in the third quarter actually led to a huge buildup of pipeline because the end consumer offtake in the festival season was very sluggish.

“On an annual basis, the market for CTVs and CPTs was more or less at the same level as in the previous year. While the slowdown in consumer demand is persisting, it is expected that the market for CTVs and CPTs will show only nominal growth even in this financial year,” it said.


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