Free entry beep for basic circles
V-Sat revenue share norms
VSNL to cut lease line rates
Lucent bags mega order
Sinha rules outrate hike to prop up rupee
ICICI plans loansyndication for Hughes project
Saregama set to play new tunes
Ceat rolls out new export strategy
Daimler to buy sparesfrom MBIL
Foreign Exchange, Bullion, Stock Indices

New Delhi, Aug 18: 
Taking a cue from the recently-announced guidelines for long-distance telephony, the government may now allow unlimited players to offer fixed basic phone services in the remaining circles and make the bidding process free.

The suggestion has already been sent to the Telecom Regulatory Authority of India (Trai).

�We are awaiting the recommendations from Trai which should be available by the month end. We have tried this system with the internet and recently allowed unlimited players to offer national long distance telephony,� said Shyamal Ghosh, secretary, department of telecommunications (DoT).

Speaking at a seminar organised by Confederation of Indian Industry (CII), Ghosh said the country will soon have a wide choice of services.�

At present, there are only six private telecom operators with licences to offer fixed basic telecom services, of which only three have fully launched their services.

Ghosh added that DoT will have to weigh all advantages and disadvantages while setting the guidelines for fixed lines service providers under a new system.

DoT sources said there was tremendous pressure from private operators and a lobby within the department was opposed to the entry of unlimited players.

�There is a group which wants a cap on the entry of players particularly in the fixed line telecom service. They have argued that unlimited players would focus only on revenue rich areas and ignore the rural and high investment terrain,� said a Telecom Commission member.

Ghosh said that the department was aware of the growing demand of bandwidth and Videsh Sanchar Nigam Limited would double its international bandwidth for expansion of internet usage by next month.

Privilege motion

The opposition members in the Rajya Sabha today sought to move a privilege motion against communications minister Ram Vilas Paswan for announcing the National Long Distance (NLD) guidelines outside Parliament when the House was in session.

The members also alleged that the government had altered the guidelines mentioned in the New Telecom Policy (NTP) for opening up of NLD.

Members belonging to the Left parties and the Congress, led by Nilotpal Basu of CPI (M) and Suresh Pachouri of the Congress, today pressed for moving the privilege motion and alleged that the minister had deviated from the original NTP.    

New Delhi, Aug 18: 
The Telecom Regulatory Authority of India (Trai) today released consultation papers to determine appropriate levels of entry fee, percentage of revenue share and licence conditions for private very small aperture terminal (V-SAT) operators.

Issues like inter-connectivity between different service providers will also be reviewed by Trai as part of a series of measures being taken before opening up STD business to private companies.    

Calcutta, Aug 18 
Videsh Sanchar Nigam (VSNL) is planning a 20 per cent reduction in tariffs on lease lines to internet service providers (ISPs).

The move is aimed at warding off the competition that will be generated when ISPs set up their own gateways. According to sources, the decision to revise tariffs will be taken at the board�s next meeting.

VSNL, however, says it is the need to boost volumes, not the threat posed by ISPs, that could lead to a cut in lease-line charges. �We are not concerned much about the private ISPs� setting up their own gateways to access international bandwidth. We are considering the rate-cut plan primarily to increase business volumes,� a senior VSNL official said. There was no word on whether dial-up connections will cost less.

VSNL, which now has a monopoly on bandwidth allocation, sells one mega byte per second (mbps) at Rs 25.10 lakh, along with a registration fee of Rs 50,000 and a security deposit of Rs 10,000.

�The more bandwidth you take, the lesser you pay for it. For instance, if you take two mbps of bandwidth, you have to pay Rs 41.8 lakh and Rs 50,000 as registration fee,� the official said.

To make the deals attractive, the company is also contemplating a sharp reduction in registration charges to prevent ISPs from accessing the international gateways. �We have created a huge bandwidth capacity in our internet lease lines. If more bandwidth is required, we will be able to provide it with the help of our collaborators,� the official said.

VSNL�s rate-cut moves could have an impact on the subscription rates of ISPs.

�We hope that the ISPs would pass on the benefits of reduced tariffs to their customers and, by doing so, promote the use of the internet in a bigger way,� sources said.

The VSNL official pointed out that the reduction will prompt ISPs to hire more bandwidth which, in turn, will make surfing much faster than it is now. �At present, the ratio of the bandwidth to the number of subscribers is dismal in the case of most service providers,� he explained.    

New Delhi, Aug 18 
Lucent Technologies has bagged a Rs 2,200-crore order from the government to supply digital local telephone exchange equipment.

This will help to bring down the waiting list for telephones in the country. The equipment is used to process telephone calls and direct it to its destination.

The department of telecom operation/department of telecom services (DoT/DTS) will procure 20,45,000 lines under the tender floated for this equipment in June.

Lucent had quoted a price of Rs 1,989 per line for the equipment. This is less than half the cost per line quoted last year by the telecom equipment manufacturers.

�The fall in equipment cost is clearly reflected in the per line cost quoted by the companies. Last year the per line cost was about Rs 4,500 per line, this will further go down once the volumes increase. The total number of lines to be awarded to the lowest and other bidders will be decided latter,� sources in DTO said.

�DTO has streamlined its procurement process and we will soon reduce the time for placing the orders,� they added.

Siemens Public Communication Network Ltd had quoted Rs 2,238.84 per line while Hindustan Teleprinters Ltd (HTL) quoted Rs 2,240.35 per line. ITI Ltd and Alcatel Networks System (India) both quoted Rs 2,396 per line. Ericcson Telecom had quoted Rs 2,636.95 per line.

DTO sources said, �:Quick placement of orders for telephone exchanges would help us to meet the targets set by the government.�

�We have set a target of achieving a tele-density of seven per cent by 2005 and 15 per cent by 2010. This can be achieved if we have lower rates and quick placement of orders,� sources said.    

New Delhi, Aug 18 
Finance minister Yashwant Sinha today admitted in Parliament that the depreciation of the Indian currency could mean a ballooning of the country�s oil bill which he described as the �only worrying factor.�

Even as the rupee has had a 5 per cent free-fall against the dollar, global oil prices have shot up to a decade�s high of $ 32.75 a barrel. Unless oil prices come down again this could mean an almost doubling of the country�s oil bill, according to analysts.

Sinha, who was answering a calling attention motion on the depreciation of the rupee, however ruled out any further hike in the Bank Rate to correct the value erosion of the Indian currency. Bank Rate has already been increased by hundred basis points to try stabilise the battered rupee.

The minister tried to explain the sudden depreciation of the rupee stating it was �temporary and manageable� and there was no cause for panic.

�It is a temporary phenomenon,� he told the lower house, adding �though the situation is difficult, there is no cause for worry as our economic fundamentals are strong and the country has enough foreign exchange reserves to meet seven-month imports.�

The country�s reserves had shot up by $ 9 billion during the BJP government�s tenure and though it had dipped marginally since a high of $ 38 billion in March this year, forex reserves still stood at about $ 36 billion.

Sinha ruled out the possibilities of analysts� predictions that the rupee would touch an exchange rate of 50 to a dollar, coming true.

Rupee rallies to 45.80

The rupee today staged a smart rally from an intra-day low of Rs 45.95/96, to finish at Rs 45.79/80 to a dollar, following unwinding of long positions by banks coupled with dollar sales by exporters.

The unwinding of dollar positions was triggered by unconfirmed reports about RBI making enquiries with banks as to the main dollar buyers in the market. Further, with dollar supplies expected to increase as a consequence of the RBI measures early this week, sales of the greenback were also witnessed among the exporters.    

Mumbai, Aug 18 
ICICI is planning to syndicate a Rs 500-crore loan to part-finance Hughes Telecom India�s Rs 3,484-crore broadband project.

ICICI has sanctioned a rupee debt underwriting facility of Rs 854.3 crore, of which it will extend Rs 350 crore as a direct loan while the rest will be raised in a syndicated arrangement with other institutions. It is in negotiations with other financial institutions such as GIC, LIC and IDBI to tie up the funds.

Hughes Telecom is setting up a broadband telecom network in Mumbai, and the rest of Maharashtra, which will provide a variety of enterprise applications. With a subscriber base of over 27,000 lines, it has already launched operations in Mumbai�s Worli area, Navi Mumbai and Pune.

The efforts to raise a syndicated loan come after ICICI hired international consultant Arthur D Little (ADL) to evaluate the broadband project. Till now, the institution has already extended Rs 220 crore from the Rs 350 crore that it committed.

The consultant assessed Hughes Telecom India�s business plan, marketing and business strategies and the impact of competition. It also reviewed the adequacy of equipment and systems and the company�s ability to complete the project according to the schedule laid down in its business plan.

Hughes Telecom India is a joint venture promoted by two US companies, Hughes Electronics Corporation (a General Motors company) and Alltel Corporation, a part from the Mittals-owned Ispat group.

The Ispat group holds around 51 per cent, Hughes 36 per cent and Alltel 13 per cent.

However, the existing equity structure is likely to change once the company goes ahead with the initial public offering (IPO) that it hopes will generate funds to complete the project. Also, the Ispat group, under pressure from financial institutions to focus on its core area of steel, do not intend to increase their commitment to Hughes Telecom India, sources said.

Maharashtra Telecom is the highest revenue-earning circle for DoT and MTNL with over 90 million subscribers. However, Hughes Telecom India is looking beyond Mumbai, and wants to roll out its network in other major towns of the state. It expects to install over 200,000 lines in two years.    

Calcutta, Aug 18 
The Gramophone Company India Limited (GCIL), which recently rechristened itself as Saregama India Ltd, is re-inventing itself as a �total entertainment� company.

The company plans to amend its memorandum of association to enable it to enlarge its area of operations and carry on new businesses which can be synergised with the existing business of music.

The company will seek shareholders� approval for passing this special resolution at its ensuing annual general meeting.

The company plans a foray into audio-visual media, video tapes, motion pictures, films, animation software, webcasting, simulcasting, broadbanding, acquisition/setting up of portals or vortals or any other such net-related content operation, transmission of music through cable, internet and all other web-related areas. It also plans to organise shows, units, skits, plays, dramas, ballets, pageants in any part of the world, and to furnish for hire and/or under licence any musical, literary and dramatic work, vocal and instrumental music to anybody in the world and to organise competition and encourage talent in the arts and crafts in any part of the world.

The company also plans to digitise its entire catalogue paving the way for its entry into liquid music and graduating to digital downloading in future as and when secure delivery formats are in place.

It is also expected to increase the advertising spend and media coverage of its e-commerce site during the year.

Last year Saregama Plc activated its e-commerce site The site was introduced in USA and Canada and extended to UK and continental Europe last year.

�This site has gone on to become the premium e-tailing site in Indian music. Encouraged by the success of this initiative, we expect to cover Asia, including India, during the course of this financial year,� a senior official of the company said.

Taking advantage of broadband growth in the country over the next few months, the company will encourage customers to log on to the company�s network, select the songs they would like to hear, send the request to it and receive a customised CD.

The GCIL board will also have a new additional director, C. Ancliff, from EMI. However, while the GCIL board initially had two EMI representatives � F. Giaccardo and C. Dimont � that has now been reduced to one.

B2B operations are likely to be launched on its e-commerce site towards the end of this financial year.

�On its successful implementation the facility will be extended to India,� he added. The company also plans to launch webcasting during this year.    

Calcutta, Aug 18 
Tyre major Ceat Ltd has come up with a new export strategy based on �adopting� certain specific markets, with its focus on countries in South East Asia and Latin America.

New products have already been developed for these markets and have received an encouraging response.

The company�s Rs 60 crore passenger car radial tyre plant at Nasik is scheduled to go onstream this month.

Addressing shareholders at the company�s 41st annual general meeting, chairman H.V. Goenka said that the manufacturing costs of radials at Nasik would be fairly competitive as all the upstream equipment required for the radial tyre plant were already available at Nasik.

Goenka said that to increase Ceat�s market presence in the 2/3 wheeler segment, it is expanding its Rado Tyres unit in Kerala. Following the expansion, Rado�s capacity will go up to 70,000 tyres per month.

At today�s AGM, the shareholders passed all the nine resolutions including the one dealing with the issue of redeemable preference shares (either cumulative or non-cumulative) not exceeding Rs 10 crore at par or at premium and in such numbers as the board may decide.    

Calcutta, Aug 18 
Daimler Chrysler will source auto components from Mercedes Benz India (MBIL) for its global operations. At the same time, the Indian arm of the German luxury car maker has shifted its export focus away from cars to auto parts and components.

�We believe that there is a tremendous potential for export of components from India,� Mercedes Benz India managing director and chief executive officer Jurgen Ziegler said.

The export of components to Daimler Chrysler units, he said, is likely to exceed DM 60 million this year from DM 40 million last year.

The company exported finished cars worth DM 18 million last year.

As part of its strategy to concentrate on component exports, Mercedes Benz India has started a special programme to develop local vendors as part of which it will broker deals between global firms and Indian firms, Ziegler said.

Daimler Chrysler AG, which holds 86 per cent in MBIL, controls 34 per cent in Mitsubishi Motors, and 10 per cent in Hyundai. A three-way joint effort is now under way to develop a small car which could roll out in the space of two years.

In India, Daimler Chrysler holds 10 per cent in Telco, and 16 per cent in Bajaj Tempo as part o f its alliances in Asia. Ziegler said it was possible that Mercedes Benz India could turn into Daimler Chrysler India in the near future.    


Foreign Exchange

US $1	Rs.45.79	HK $1	Rs. 5.80*
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Euro	Rs. 41.83	Sing $1	Rs. 25.35*
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*SBI TC buying rates; others are forex market closing rates


Calcutta	Bombay

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