Bharti sets sights on east
Allianz plans to enter pension funds business
Watchdog to monitor use of power funds
Debentures of BPL downgraded
Shareholders must okay party funding
Small firms can log in for print ads
KLG sounds Bengal on power loss trackers
Bollywood spin to expose advertising tall claims
Study sees telecom growth

Calcutta, Dec. 22: 
Bharti Mobitel, a Bharti Televentures subsidiary, plans to increase its focus on the eastern region, signalled by the launch of its AirTel brand here today.

“The launch of AirTel signals our arrival in the east. We plan to spread out to other parts of the region from here,” group chairman and managing director Sunil Bharti Mittal said. He said Bharti will bid for licences for providing cellular services in West Bengal, Bihar and Orissa, as and when the time comes.

AirTel will replace the ‘Spice’ brand in the city. With this launch, the AirTel brand would be available in six cities, Delhi topping the list in terms of market leadership, company officials said. Bharti has also installed a new switching system supported by Siemens, with a capacity of 2.5 lakh connections.

The company’s pre-paid brand ‘Magic’ will make its Calcutta debut in the first week of January. Anil Nayyar, president, mobility division, said all services of both brands will be available to subscribers in the city.

Regarding the AirTel service in Calcutta, Nayyar says, “This is the first GSM-based GPRS ready network in the country. The network in the city has a capacity to handle 2,50,000 post-paid and 1,25,000 pre-paid subscribers. An improved voice-mail facility will now be able to cover the entire subscriber base instead of a mere 10,000 earlier.” Bharti Mobitel presently has 125 base stations and a subscriber base of around 90,000 in the city, Nayyar said, adding that the company is expected to double its subscriber base in 2002.

Mittal said Bharti aims to command 90 per cent of the country’s cellular market. Its footprint extends across 15 states, covering almost 600 million customers.

Regarding Bharti Televentures’ initial public offer, he said the company has received a “letter of observation” from the Securities and Exchange Board of India. It will study the details along with lead managers and bankers and take action.


New Delhi, Dec. 22: 
Allianz AG, the $ 63-billion multinational company, is planning to expand its presence in India by foraying into the pension funds business and later venture into asset management. It is already present in the domestic insurance market.

Speaking to The Telegraph, Allianz AG executive vice-president, Asia-Pacific, Heinz Dollberg said the company will be among the first to submit applications to enter the pension fund business.

“The pension reforms committee report says that private companies can foray into the sector by October next year. Once that happens, we will set up our pension venture,” Dollberg said.

However, he refused to comment on whether it will be with its existing partner Bajaj Auto. At present, Allianz is partnering with Bajaj Auto in Bajaj-Allianz insurance venture which has entered into both life and non-life insurance business.

Allianz is planning to enter the asset management business. “We are keen on setting up an AMC for running the mutual fund. But that is sometime later,” he said.

Last month, Allianz has formalised a technical co-operation agreement for asset management in China with Guotai Junan Securities

According to Dollberg, in addition to its own eight offices, the company is also talking to Standard Chartered for distributing the insurance products.

“We are planning to tie up with other private and public sector banks and intermediaries for enhancing our distribution channel apart from increasing our retail branches to 22 within a year or so,” he said.

The insurance venture has sold more than 45,000 policies till October-end and expects to earn a revenue of $ 12 million (Rs 58 crore) in its first year of operations. “We expect to break even in three-to-five years’ time,” he said.

According to him, there is a need to increase the foreign equity-holding in insurance ventures which is now limited to a maximum of 26 per cent. “Most of the insurance ventures have Indian partners with diversified business interests. As insurance business is capital intensive, in the initial stages it may not be possible for the Indian partners to pump in more money,” he said.

However, he clarified, the insurance venture with Bajaj will not need any cash infusion right now. The venture has sufficient cash and there will be no financial problems. After three to four years of operation a sum of around Rs 350 crore may be needed for pushing ahead further.


Calcutta, Dec. 22: 
Unhappy over the progress of power sector reforms in the country, the Union power ministry is planning to set up a new entity — Power Infrastructure Development Corporation for monitoring the utilisation of funds allotted to different states under the accelerated power development programme (APDP).

Sources said that the Union power minister Suresh Prabhu met with the chairpersons of all the state electricity boards (SEBs) to discuss the corporation’s operation and the SEBs role in it.

The move to monitor the proper deployment of funds under APDP comes in the wake of the power ministry’s decision to restructure all the 450 power circles and invest Rs 4,500 crore for strengthening the power distribution system during the current fiscal. Initially, 60 out of 450 power circles will be treated as centres of excellence.

The projects would be primarily funded by the APDP. The current year’s allocation of Rs 1,500 crore for APDP is being doubled to fund distribution reforms.

“Pilferage of power, as well as, technical losses are the most important causes for the SEB’s revenue losses. Revamping the transmission and distribution system and modernisation of power plants along with a check on power theft will result in lower T&D loss. The corporation will try to keep a tab on how the states are tackling the problem through proper deployment of APDP funds,” a senior power ministry official said.

The country is losing Rs 20,000 crore annually due to power thefts.

The official said, “We are targeting to convert all distribution feeders into profit centres to keep track of proper accounting and accountability at each level to check power theft.”

The memorandum of understanding, which the power ministry has signed with various state governments, lay down a strict time-table for distribution utilities to achieve a break-even status based on a host of time-bound metering initiatives and theft control.

Senior officials of the West Bengal State Electricity Board said: “Setting up of the corporation is a welcome step. We also want that the funds under APDP should be deployed properly so that consumers receive quality power. We understand that a substantial amount of the tax payers’ money is set aside for this purpose. It will serve the country well if the government keeps some monitoring mechanisms to ensure effective use of funds.”

West Bengal has already initiated power sector reforms by transferring the generating stations under West Bengal State Electricity Board to West Bengal Power Development Corporation.


Mumbai, Dec. 22: 
The outstanding ratings of BPL Limited, the leading colour television maker, has been downgraded by Crisil.

In a statement, Crisil said the ratings have been downgraded because the anticipated correction in the financial risk profile has not fructified within the envisaged time-frame. The company’s net margins and interest coverage indicators have weakened in the half-year ended September 30 on account of continued high working capital requirements and no significant debt reduction.

The ratings assigned to the various outstanding non-convertible debenture programmes of BPL have been downgraded to “A-” from “A+”.


New Delhi, Dec. 22: 
Companies that funnel cash to political parties at the time of elections should be required to report the transactions in their profit and loss accounts and should seek the approval of their shareholders before they do so since the “decision to contribute to a political party requires special validation”, says the Confederation of Indian Industry (CII).

The apex industry forum has welcomed the proposed legislation to allow corporates to fund political parties as that will legitimise a process that has continued outside public gaze.

The Companies Act already permits corporates to provide funds to political parties under section 293 A with the express rider that only companies with three-year profit records should be allowed this dispensation. The section also caps the amount at 5 per cent of the average net profit in the preceding three years. CII has suggested that such donations should be made tax deductible without spelling out to what extent.

The Union cabinet, which cleared a proposal to introduce a legislation on state funding on elections in an attempt to stamp out the use of money power to subvert the election process, had said that while computing the amount of income tax on the total income of an Indian company, the amount contributed directly or indirectly to a political party or for any political purpose may be allowed as deduction from the amount of income tax computed.

CII said such a legislation was long overdue and would bring in the much needed transparency into the system.

CII had been working very closely with the Inderjit Gupta Committee, which had gone into various aspects of election funding. It reiterated that such a Bill was essential to curb financial malpractices in elections through an alternative system of the government funding of the poll expenses for the candidates.

CII felt that the states should take over the funding of elections and that the funding should be provided only to those parties recognised at the national or state levels by the Election Commission of India.

CII hoped that the recommendations, which it had suggested to the Inderjit Gupta committee would be taken into consideration when the Bill is introduced in parliament.

The foremost suggestion was that political parties should compulsorily submit their annual accounts regularly to the Income Tax authorities.

All donations received by political parties above the amount of Rs 10,000 should be accepted only by means of cheque or draft and the names of such donors should be clearly disclosed in the accounts. This would impart greater transparency in party accounts.

CII also said the government and public sector companies should not be allowed to contribute funds to the political parties. However, the decision whether there should be any ban on donations by other companies and corporate bodies for political parties should be left to the government, CII has said.


New Delhi, Dec. 22: 
Advertising agency RK Swamy/BBDO has introduced a web-based service to cater to the small and medium size enterprises who want to bring out print media ads but are spurned by the big ad agencies.

The site — — allows the advertiser to choose the publication with specifications like date and edition, create the ad through the help of pre-designed templates for display ads and relevant information for classified ads. The website will provide information on classified ads, classified display ads and display ads.

Finally, the user can make online payments through credit card or a deposit in ICICI Bank in the concerned city or through a demand draft.

“Basically we are targeting non-branded advertisers who do not need too much of creative services,” said Karthik Kumar, CEO of, the umbrella body for advertising related services to be offered by the agency on the web. Another service — media planning for other advertising agencies is also on the pipeline.

Loginads charges 10 per cent service charge on the advertisement for the ads released. The company has sunk Rs 5 crore in the project and expects to achieve cash breakeven in six months. So far, it has got about 50 registered users.

“We want to take the process of advertising to the doorstep of the advertiser, especially, those who need assistance in knowing how to go about their advertising needs,” said S Narendra, executive director of R.K. Swamy/BBDO.

The mainstay of the venture remains classified ads like financial ads, tender and legal notices. It is also targeting bulk advertisers with repetitive needs like recruitment ads of the government and advertisers in remote areas. The site offers complete information on cost and technical specifications of about 180 publications as well as various advertising packages


New Delhi, Dec. 22: 
KLG Systel, a software company that specialises in power metering, has approached the West Bengal government to sell its products, even as Union power minister Suresh Prabhu is putting pressure on state electricity boards to bring down transmission and distribution losses.

KLG executives were recently in Calcutta to demonstrate the powers of their software to the mandarins at Writers’ Buildings.

West Bengal State Electricity Board (WBSEB) officials were also present at the meeting to examine the potential of the company’s products in areas such as calculation of transmission and distribution losses, voltage reduction analysis, load forecasting, system improvement and capacitor allocation, power audits, technical training and power optimisation.

Sources, who attended the meeting, said: “We are in the initial stages of discussion. We have yet to decide whether to go for a bidding process or adopt other methods like entering into a memorandum of understanding.”

KLG Systel also offers products on plant life cycle solutions to the process, power, manufacturing and infrastructure sectors. The company’s power system solutions division offers integrated software solutions in the areas of transmission and distribution.

According to an electric power survey undertaken by the Federation of Indian Chambers of Commerce and Industry, parts of the country are perennially short of electric power. It is estimated that the country’s power capacity requirement should be 1,00,000 megawatt as against the peak capacity of 70,000 MW.

This shortfall of 30,000 MW is putting a tremendous strain on the economic development of the country and immediate steps need to be taken to reduce losses in distribution and power generation.

In fact, the latest CII survey on business confidence had noted that the biggest infrastructural concern of industry was power shortage.

KLG Systel has tied up with a worldwide leader of Power System software solutions called OTI (Operation Technology Inc) to launch various power software packages, intelligent energy management systems with real time applications used by industrial plants and power utilities.


Calcutta, Dec. 22: 
The Advertising Standards Council of India (ASCI) has hit upon a novel way to attract consumer complaints against advertisements on television, print or bill boards.

Taking a cue from Bollywood, ASCI has coined a slogan ‘Jhoot Bole ASCI Kate,’ (inspired by Hrishikesh Mukherjee’s ‘Jhoot Bole Kauwa Kaate’) as a warning to erring advertisers and advertisement agencies. COnsidering the action taken, the slogan seems to have hit home.

The ASCI’s Consumer Complaints Council (CCC) has forwarded 13 cases of non-compliance by eight companies and agencies to its board of governors, the watchdog’s highest decision making forum.

Companies which have incurred the ASCI’s displeasure include big names like TTK-LIG, J.K. Industries, Philips India, Anchor Health and Beauty Care, Ozone Ayurvedics and Spectrum Magazines Ltd, and advertising agencies such as Art Advertising and McCann Erickson among others.

The CCC upheld complaints against these companies and their agencies during the April-June and July–September quarters, on the grounds of making unsubstantiated and exaggerated claims and misleading consumers. Of the 26 complaints received during the July-September quarter, advertisers and their agencies either withdrew or modified their advertisements in 15 cases.

A CCC member, who requested anonymity, said in a couple of cases where the advertiser and the ad agency repeated the same insertions during the July-September quarter even after they were cautioned in the previous quarter.

The CCC in its report for the April-June quarter took exception on the insertion by Frankfinn Management Consultants, stating that “125 vacancies for air hostess/flight stewards are expected to be filled shortly’’ in various newspapers in March. The CCC held the “advertisement highly exaggerated and not factual’’. But Frankfinn ignored its directive,and continued to put up similar insertions, attracting another reprimand from the CCC reprimand in its July-September report.


Mumbai, Dec. 22: 
The country’s market for telecom services is projected to double in value to Rs 77,000 crore in 2004-05 from the current Rs 32,500 crore, a study by CRIS INFAC, the subsidiary of leading rating agency Crisil has said.

The study observed that the market for basic telecom services market is expected to grow at a rate of 81.5 per cent to Rs 53,200 crore from Rs 27,000 in the previous fiscal.It said the three public sector telecom operators, Bharat Sanchar Nigam Ltd, Mahanagar Telephone Nigam Ltd and Videsh Sanchar Nigam Ltd are likely to be the biggest beneficiaries of the high growth rate.


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